Regulatory and compliance legal updates from Shoosmiths LLPhttps://www.shoosmiths.co.uk/rss/5695.aspxRegulatory and compliance legal updates from Shoosmiths LLPen-GBShoosmithshttps://www.shoosmiths.co.uk/-/media/shoosmiths/shoosmiths-rss-image.jpg?h=144&w=144Regulatory and compliance legal updates from Shoosmiths LLPhttps://www.shoosmiths.co.uk/rss/5695.aspx60{F674194F-5EBD-4E15-BE41-C90B58C71240}https://www.shoosmiths.co.uk/news/press-releases/shoosmiths-appointed-to-inaugural-wework-emea-legal-panel.aspxShoosmiths appointed to inaugural WeWork EMEA legal panelShoosmiths will work closely with WeWork, a global space, community and service company and will focus, in particular, in providing legal advice in the following key areas in the UK and Ireland, Employment; Commercial; Corporate; and Health & Safety and Environmental.Tue, 03 Sep 2019 00:00:00 +0100<![CDATA[Mark Elder ]]><![CDATA[Shoosmiths will work closely with WeWork, a global space, community and service company and will focus, in particular, in providing legal advice in the following key areas in the UK and Ireland, Employment; Commercial; Corporate; and Health & Safety and Environmental.]]>{D2C12069-ED98-49B5-B75B-2BB1EF3FE4AB}https://www.shoosmiths.co.uk/client-resources/legal-updates/sfo-struggles-to-prosecute-individuals-following-a-dpa.aspxSFO struggles to prosecute individuals following a DPAThe recent acquittal of the Sarclad executives throws into doubt the prosecution of individuals following a deferred prosecution agreement (DPA) and the suitability of the DPA process as a whole.Thu, 01 Aug 2019 00:00:00 +0100<![CDATA[Dan Stowers]]><![CDATA[The recent acquittal of the Sarclad executives throws into doubt the prosecution of individuals following a deferred prosecution agreement (DPA) and the suitability of the DPA process as a whole.]]>{A477E41A-7FC4-458C-8254-2BB99F6AF4A2}https://www.shoosmiths.co.uk/news/press-releases/shoosmiths-secures-first-ever-bribery-acquittal-for-client-following-deferred-prosecution-agreement.aspxShoosmiths secures the first ever bribery acquittal for its client following a Deferred Prosecution AgreementShoosmiths’ client, Michael Sorby, was on 16 July 2019 acquitted on a corruption allegation following trial by jury. Allegations of bribery against Mr Sorby were stopped by the trial Judge who found there was no evidence to support the allegation brought by the Serious Fraud Office (SFO). This followed the Deferred Prosecution Agreement (DPA) entered into by the SFO and Sarclad Ltd in July 2016.Wed, 17 Jul 2019 00:00:00 +0100<![CDATA[Dan Stowers]]><![CDATA[Shoosmiths’ client, Michael Sorby, was on 16 July 2019 acquitted on a corruption allegation following trial by jury. Allegations of bribery against Mr Sorby were stopped by the trial Judge who found there was no evidence to support the allegation brought by the Serious Fraud Office (SFO). This followed the Deferred Prosecution Agreement (DPA) entered into by the SFO and Sarclad Ltd in July 2016.]]>{9DEC158A-1A0F-4C76-97FA-98D8EDEBF7BF}https://www.shoosmiths.co.uk/news/press-releases/shoosmiths-client-cleared-in-sfo-corruption-trial.aspxShoosmiths client cleared in SFO corruption trialShoosmiths’ client, Michael Sorby, was today acquitted of all charges in a bribery prosecution brought by the Serious Fraud Office (SFO). The prosecution followed a Deferred Prosecution Agreement entered into by the SFO and Sarclad Ltd in July 2016.Tue, 16 Jul 2019 00:00:00 +0100<![CDATA[Dan Stowers]]><![CDATA[Shoosmiths’ client, Michael Sorby, was today acquitted of all charges in a bribery prosecution brought by the Serious Fraud Office (SFO). The prosecution followed a Deferred Prosecution Agreement entered into by the SFO and Sarclad Ltd in July 2016.]]>{556963E0-15B6-4098-8BA5-0F46E845ACDE}https://www.shoosmiths.co.uk/client-resources/legal-updates/government-legislates-in-bid-for-net-zero-carbon-emissions.aspxGovernment legislates in bid for net zero carbon emissionsThe government has amended the Climate Change Act 2008 to set a target of achieving net zero carbon emissions by 2050.Thu, 04 Jul 2019 00:00:00 +0100<![CDATA[Angus Evers Grace Mitchell]]><![CDATA[The government has amended the Climate Change Act 2008 to set a target of achieving net zero carbon emissions by 2050.]]>{9FD218DC-F9F7-46F0-BCB0-57479D357111}https://www.shoosmiths.co.uk/client-resources/legal-updates/limber-up-for-rate-reform.aspxLimber up for rate reformRate reform has been high on the FCA agenda since 2013, arising out of the financial crisis in 2007. And this year will see Finance House Base Rate (FHBR) disappear. In this article, we consider what firms should be doing now to prepare for this.Thu, 27 Jun 2019 00:00:00 +0100<![CDATA[Gemma Napper Stephen Dawson ]]><![CDATA[Rate reform has been high on the FCA agenda since 2013, arising out of the financial crisis in 2007. And this year will see Finance House Base Rate (FHBR) disappear. In this article, we consider what firms should be doing now to prepare for this.]]>{54536306-0876-4C9E-8A18-559897FB9CE2}https://www.shoosmiths.co.uk/client-resources/legal-updates/impact-of-sentencing-guideline-on-regulatory-fines.aspxImpact of sentencing guideline on regulatory finesThe impact of the Health and Safety, Corporate Manslaughter and Food Safety and Hygiene Offences Definitive Guideline (the “Guideline”), introduced on 1 February 2016, has recently been analysed in a Sentencing Council report (impact assessment).Thu, 06 Jun 2019 00:00:00 +0100<![CDATA[Joanne Sear ]]><![CDATA[The impact of the Health and Safety, Corporate Manslaughter and Food Safety and Hygiene Offences Definitive Guideline (the “Guideline”), introduced on 1 February 2016, has recently been analysed in a Sentencing Council report (impact assessment).]]>{6B724404-4E11-4F47-BF33-EC7B3C79E942}https://www.shoosmiths.co.uk/client-resources/legal-updates/when-an-occupiers-waste-becomes-a-landowners-problem.aspxWhen an occupier’s waste becomes a landowner’s problemA landowner has been convicted and fined after his tenants illegally stockpiled waste wood on his land.Mon, 31 Dec 2018 00:00:00 Z<![CDATA[Angus Evers Joanne Sear ]]><![CDATA[A landowner has been convicted and fined after his tenants illegally stockpiled waste wood on his land.]]>{BCE190F7-053C-422D-83F1-47761B1BFD44}https://www.shoosmiths.co.uk/client-resources/legal-updates/business-energy-efficiency-reporting-goodbye-crc-hello-secr.aspxBusiness energy efficiency reporting – goodbye CRC, hello SECRAfter abolishing the CRC Energy Efficiency Scheme, the government has made regulations requiring additional reporting by quoted companies, large unquoted companies and large LLPs on greenhouse gas emissions, energy consumption and energy efficiency action.Thu, 22 Nov 2018 00:00:00 Z<![CDATA[Angus Evers Grace Mitchell]]><![CDATA[After abolishing the CRC Energy Efficiency Scheme, the government has made regulations requiring additional reporting by quoted companies, large unquoted companies and large LLPs on greenhouse gas emissions, energy consumption and energy efficiency action.]]>{986303D5-C350-47C8-96FF-3241918E7A2E}https://www.shoosmiths.co.uk/client-resources/legal-updates/sentences-for-manslaughter-offences-set-to-increase-14499.aspxSentences for manslaughter offences set to increase The Sentencing Council has released a definitive sentencing guideline for manslaughter offences which will come into force on 1 November 2018. It is the first time a comprehensive guideline has been published for these offences and the Sentencing Council has said it hopes the guideline will promote consistency in sentences for manslaughter that truly reflect the true seriousness of the crimes. The guideline deals with all of the manslaughter offences, from unintended death arising from assault to workplace fatalities, in one document. It is notable that gross negligence manslaughter, which often applies in a health and safety context, has been dealt with separately to other health and safety offences (including corporate manslaughter) which are dealt with in the Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences Definitive Guideline, which was introduced in February 2016. This indicates that policy makers and the judiciary do not wish to distinguish between different types manslaughter in different environments and want to ensure that the punishments match the consequences of the crime in all cases, namely the loss of life. It has been widely recognised that the Sentencing Guidelines for Health and Safety Offences which came into force on February 2016, brought with them huge increases in the levels of fines, with fine levels regularly exceeding £1 million. The new manslaughter guideline, which applies to individuals, is seen to be the final piece of the puzzle, bringing the sentences for gross negligence manslaughter definitively in line with other health and safety offences. For gross negligence manslaughter, the guideline provides sentencing judges with a range of sentencing options from one to 18 years imprisonment per offence. It takes into account culpability on a sliding scale from A-D (A being very high), and states that, given the loss of life, harm will always be of the utmost seriousness. Then, the guidelines provide the courts with a sentencing starting point and ranges for each of the culpability categories. It goes on to list a number of aggravating and mitigating factors for the courts to consider which will, in turn, affect the length of the sentence handed down. Given that the guideline deals with a wide range of offences arising from a number of different circumstances, the aggravating and mitigating factors are not tailored to offences arising in a health and safety/workplace context. The aggravating factors most applicable to a death in the workplace situation include; previous convictions, ignoring previous warnings and others put at risk of harm by the offending. Relevant mitigating factors include; no previous convictions, the offender was subject to stress or pressure which contributed to the negligent conduct, cooperation with the investigation, the negligent conduct was compounded by the actions or omissions of others beyond the offender's control and for reasons beyond the offender's control they hadn't been properly trained or supported. It is interesting to note that the list of mitigating factors has changed quite significantly since the draft guideline was published and a number of factors were added to the final document. This is as a result of the responses to the consultation submitted by a number of industry bodies including the Law Society, the Health and Safety Lawyers Association and the TUC. Generally, it was felt among these organisations that the draft guideline was not fit for purpose and would not appropriately assist courts in sentencing offences arising from workplace deaths. While there have been improvements in this regard since the draft was published, it could be said that the guideline still lacks specificity in relation to gross negligence manslaughter in a workplace context. Perhaps a better home for these types of offences would have been within the existing Sentencing Guidelines for Health and Safety Offences. The true impact of the guideline remains to be seen. We expect that sentences will increase significantly for gross negligence manslaughter offences and it will be interesting to see how the Courts apply the guideline to offences arising from a death in the workplace. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Wed, 01 Aug 2018 00:00:00 +0100<![CDATA[Hayley Saunders ]]><![CDATA[ The Sentencing Council has released a definitive sentencing guideline for manslaughter offences which will come into force on 1 November 2018. It is the first time a comprehensive guideline has been published for these offences and the Sentencing Council has said it hopes the guideline will promote consistency in sentences for manslaughter that truly reflect the true seriousness of the crimes. The guideline deals with all of the manslaughter offences, from unintended death arising from assault to workplace fatalities, in one document. It is notable that gross negligence manslaughter, which often applies in a health and safety context, has been dealt with separately to other health and safety offences (including corporate manslaughter) which are dealt with in the Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences Definitive Guideline, which was introduced in February 2016. This indicates that policy makers and the judiciary do not wish to distinguish between different types manslaughter in different environments and want to ensure that the punishments match the consequences of the crime in all cases, namely the loss of life. It has been widely recognised that the Sentencing Guidelines for Health and Safety Offences which came into force on February 2016, brought with them huge increases in the levels of fines, with fine levels regularly exceeding £1 million. The new manslaughter guideline, which applies to individuals, is seen to be the final piece of the puzzle, bringing the sentences for gross negligence manslaughter definitively in line with other health and safety offences. For gross negligence manslaughter, the guideline provides sentencing judges with a range of sentencing options from one to 18 years imprisonment per offence. It takes into account culpability on a sliding scale from A-D (A being very high), and states that, given the loss of life, harm will always be of the utmost seriousness. Then, the guidelines provide the courts with a sentencing starting point and ranges for each of the culpability categories. It goes on to list a number of aggravating and mitigating factors for the courts to consider which will, in turn, affect the length of the sentence handed down. Given that the guideline deals with a wide range of offences arising from a number of different circumstances, the aggravating and mitigating factors are not tailored to offences arising in a health and safety/workplace context. The aggravating factors most applicable to a death in the workplace situation include; previous convictions, ignoring previous warnings and others put at risk of harm by the offending. Relevant mitigating factors include; no previous convictions, the offender was subject to stress or pressure which contributed to the negligent conduct, cooperation with the investigation, the negligent conduct was compounded by the actions or omissions of others beyond the offender's control and for reasons beyond the offender's control they hadn't been properly trained or supported. It is interesting to note that the list of mitigating factors has changed quite significantly since the draft guideline was published and a number of factors were added to the final document. This is as a result of the responses to the consultation submitted by a number of industry bodies including the Law Society, the Health and Safety Lawyers Association and the TUC. Generally, it was felt among these organisations that the draft guideline was not fit for purpose and would not appropriately assist courts in sentencing offences arising from workplace deaths. While there have been improvements in this regard since the draft was published, it could be said that the guideline still lacks specificity in relation to gross negligence manslaughter in a workplace context. Perhaps a better home for these types of offences would have been within the existing Sentencing Guidelines for Health and Safety Offences. The true impact of the guideline remains to be seen. We expect that sentences will increase significantly for gross negligence manslaughter offences and it will be interesting to see how the Courts apply the guideline to offences arising from a death in the workplace. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{3E5B5ADF-9325-4FD1-A00C-882D85A7661D}https://www.shoosmiths.co.uk/client-resources/legal-updates/landowners-liability-for-occupiers-abandoned-waste-14166.aspxLandowners&#39; liability for occupiers&#39; abandoned waste An unsuccessful appeal by a landowner against a conviction for knowingly permitting an unauthorised waste operation on its land has highlighted the risks to landowners of incurring criminal liability if former occupiers abandon waste on their land. The High Court has recently clarified the circumstances in which landowners can face criminal liability for waste abandoned on their land by former occupiers. Commercial landlords need to be aware of the risks and consider how they might be minimised, because the judgment imposes virtually strict liability on landowners in circumstances where occupiers cease trading and abandon waste on their land. Background Salhouse Norwich Ltd owned a site in Norwich, which it leased to a mattress recycling business. The business did not have an environmental permit or a waste exemption. In August 2015, the Environment Agency served an enforcement notice on the tenant, requiring it to remove the mattresses. The tenant didn't comply, and ceased trading, abandoning over 20,000 mattresses (weighing 471 tonnes). The mattresses remained on the site after the tenant ceased trading. Salhouse Norwich proposed a remedial plan to attempt to clear the site, but the Environment Agency rejected it and charged Salhouse Norwich with the offence of knowingly permitting the storage of waste without an environmental permit. One of Salhouse Norwich's directors was also charged in a personal capacity, because the company was said to have acted with his consent or connivance, or the offence was attributable to his neglect. Both Salhouse Norwich and the director were convicted in the Magistrates' Court, receiving a fine and 150 hours of unpaid community work respectively. They both appealed. The appeal On appeal, the High Court upheld the convictions and found that Salhouse Norwich and the director were guilty because: the continued presence of the mattresses on the land after the tenant abandoned them amounted to a waste storage operation; and they had known that the mattresses were present on the land, but had failed to ensure their removal. All the Environment Agency therefore needed to prove was that Salhouse Norwich and the director knew that the mattresses were present on the land and had done nothing to prevent them being there. There was no need to prove any positive act by them. What does the case mean for landowners? The judgment is a harsh outcome for landowners, as it seems to require them to take positive action to clean up their land if former occupiers abandon waste on it. Once they are aware of the presence of a former occupier's waste on their land, they are guilty of knowingly permitting an illegal waste storage operation if they do nothing to remove it. In addition to or instead of prosecuting for carrying out illegal waste operations without a permit, the Environment Agency, Natural Resources Wales and local authorities have powers to serve notices on landowners requiring the removal of waste when it has been illegally deposited or illegally stored on land. Failing to comply with such a notice is also an offence. As highlighted in our March 2018 update 'Imminent changes to waste rules - it's not all rubbish', these powers have recently been extended significantly, and the position now is that a landowner can also be served with a notice requiring it to remove waste when the waste was deposited with legal authority but where that authority has expired, when the occupier cannot be found, or when the occupier was served with a notice but didn't comply with it. Landowners can also be charged landfill tax if they knowingly permit the illegal deposit of waste on their land. Our experience is that, where possible and practicable, regulators will pursue occupiers in preference to landowners. However, regulators will look to landowners to make up the shortfall where an occupier has disappeared or become insolvent. Before allowing a third party such as a tenant or licensee to occupy its land, a landowner should carefully consider the nature of the occupier's business and whether it involves waste. If it does, the landowner should ask: Are the necessary environmental permits and planning permissions in place for the occupier's proposed use of the land?; Is the occupier's business established and reputable?; Is the occupier's business financially solvent? If the answer to all of these questions is yes, then the risk of the occupier disappearing and abandoning waste is reduced. Prevention in these circumstances in better than a cure. Stone and Salhouse Norwich Ltd v Environment Agency [2018] EWHC 994 (Admin) DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Fri, 25 May 2018 00:00:00 +0100<![CDATA[Angus Evers Joanne Sear ]]><![CDATA[ An unsuccessful appeal by a landowner against a conviction for knowingly permitting an unauthorised waste operation on its land has highlighted the risks to landowners of incurring criminal liability if former occupiers abandon waste on their land. The High Court has recently clarified the circumstances in which landowners can face criminal liability for waste abandoned on their land by former occupiers. Commercial landlords need to be aware of the risks and consider how they might be minimised, because the judgment imposes virtually strict liability on landowners in circumstances where occupiers cease trading and abandon waste on their land. Background Salhouse Norwich Ltd owned a site in Norwich, which it leased to a mattress recycling business. The business did not have an environmental permit or a waste exemption. In August 2015, the Environment Agency served an enforcement notice on the tenant, requiring it to remove the mattresses. The tenant didn't comply, and ceased trading, abandoning over 20,000 mattresses (weighing 471 tonnes). The mattresses remained on the site after the tenant ceased trading. Salhouse Norwich proposed a remedial plan to attempt to clear the site, but the Environment Agency rejected it and charged Salhouse Norwich with the offence of knowingly permitting the storage of waste without an environmental permit. One of Salhouse Norwich's directors was also charged in a personal capacity, because the company was said to have acted with his consent or connivance, or the offence was attributable to his neglect. Both Salhouse Norwich and the director were convicted in the Magistrates' Court, receiving a fine and 150 hours of unpaid community work respectively. They both appealed. The appeal On appeal, the High Court upheld the convictions and found that Salhouse Norwich and the director were guilty because: the continued presence of the mattresses on the land after the tenant abandoned them amounted to a waste storage operation; and they had known that the mattresses were present on the land, but had failed to ensure their removal. All the Environment Agency therefore needed to prove was that Salhouse Norwich and the director knew that the mattresses were present on the land and had done nothing to prevent them being there. There was no need to prove any positive act by them. What does the case mean for landowners? The judgment is a harsh outcome for landowners, as it seems to require them to take positive action to clean up their land if former occupiers abandon waste on it. Once they are aware of the presence of a former occupier's waste on their land, they are guilty of knowingly permitting an illegal waste storage operation if they do nothing to remove it. In addition to or instead of prosecuting for carrying out illegal waste operations without a permit, the Environment Agency, Natural Resources Wales and local authorities have powers to serve notices on landowners requiring the removal of waste when it has been illegally deposited or illegally stored on land. Failing to comply with such a notice is also an offence. As highlighted in our March 2018 update 'Imminent changes to waste rules - it's not all rubbish', these powers have recently been extended significantly, and the position now is that a landowner can also be served with a notice requiring it to remove waste when the waste was deposited with legal authority but where that authority has expired, when the occupier cannot be found, or when the occupier was served with a notice but didn't comply with it. Landowners can also be charged landfill tax if they knowingly permit the illegal deposit of waste on their land. Our experience is that, where possible and practicable, regulators will pursue occupiers in preference to landowners. However, regulators will look to landowners to make up the shortfall where an occupier has disappeared or become insolvent. Before allowing a third party such as a tenant or licensee to occupy its land, a landowner should carefully consider the nature of the occupier's business and whether it involves waste. If it does, the landowner should ask: Are the necessary environmental permits and planning permissions in place for the occupier's proposed use of the land?; Is the occupier's business established and reputable?; Is the occupier's business financially solvent? If the answer to all of these questions is yes, then the risk of the occupier disappearing and abandoning waste is reduced. Prevention in these circumstances in better than a cure. Stone and Salhouse Norwich Ltd v Environment Agency [2018] EWHC 994 (Admin) DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{5D8AB85C-F649-44EB-A11A-FC0509BAAECE}https://www.shoosmiths.co.uk/client-resources/legal-updates/imminent-changes-waste-rules-13950.aspxImminent changes to waste rules - it&#39;s not all rubbish Waste crime has been identified by the government as one of the most critical problems in the environmental sector. The government is, therefore, making efforts to tackle illegal waste management activity and, as part of that, is making changes to the law which could catch out landowners if they are not prepared. Landfill tax on illegal deposits of waste Avoiding landfill tax is one of the main drivers for illegal waste management activity, in particular fly-tipping. Illegal waste disposal sites that are not registered for landfill tax undercut legitimate landfill sites. However, from 1 April 2018 the landfill tax regime will be changing in England and Wales. The new changes will apply to both permitted and non-permitted landfill sites, but the tax rates will be different in England and Wales. Sites in England which operate without the necessary environmental permit will be liable for landfill tax at the standard rate (£88.95 per tonne) on all material. Sites in Wales which operate without the necessary environmental permit will be liable for landfill disposals tax (as the tax is to be known in Wales from 1 April 2018) at an unauthorised disposals rate of £133.45 per tonne (150% of the rate in England). All material at illegal sites on and after 1 April 2018 will be caught by the tax. Currently, certain material deposited at permitted sites is exempt from landfill tax, but the changes will disapply the exemptions for illegal sites so that all material deposited at them is taxable. Any person who deposits waste or knowingly permits the deposit of waste at an illegal site could become liable for landfill tax, in addition to facing a separate criminal prosecution for waste offences. HMRC will be able to charge an additional penalty of up to 100% of the tax due, and will also have the right to prosecute those who do not pay. New powers to require owners and occupiers of land to remove illegally stored waste From 9 May 2018 the Environment Agency, Natural Resources Wales and local authorities will all be able to serve a notice on the occupier of land requiring it to remove illegally stored waste, regardless of whether or not the waste was illegally deposited on the land in the first place. It will be a criminal offence to fail to comply with such a notice. Previously, regulators only had the power to require the removal of waste that had been illegally deposited. An unwelcome change for landowners is that if the land is unoccupied or the regulator cannot identify the occupier without incurring unreasonable expense, then the notice can be served on the landowner. Further, if a notice is served on the occupier and it fails to comply with the notice, or if it successfully appeals against a notice on the grounds that it didn't keep or deposit, or knowingly cause or knowingly permit, the keeping or deposit of the waste, then the regulator can serve a new notice on the owner of the land. What does this mean for landowners? Although the government has indicated that safeguards will be in place to ensure that landowners and waste producers who are unknowingly involved in illegal waste disposal activity will not be liable for the new landfill tax penalties, in practice it may be difficult for a landowner to prove that waste is not being stored illegally on a site where it was deposited lawfully, particularly where the occupier's permit has expired or been revoked, or where the occupier changes. Even if they are safeguarded against liability for landfill tax, landowners may still find themselves liable for the costs of removing waste brought on to their land lawfully, but subsequently stored illegally. The government has not undertaken any impact assessment of the likely costs to landowners in England, but the Welsh Government's impact assessment estimates that the costs to landowners of clearing waste from their land would be between £26,850 and £84,600. What can landowners do to protect themselves? Landowners should ensure greater due diligence is undertaken at the outset when considering potential tenants and other occupiers of their land who intend to use the land for waste management activities. Where occupiers are already in place, landowners should undertake a review of any environmental permits or exemptions they hold, in order to ensure that the site is operating lawfully and within the limits of any permit or exemption. Consideration should also be given to requiring occupiers undertaking waste management activities to provide a deposit or other security to the landowner, which the landowner can use if it incurs any liability to pay landfill tax or to remove waste from the land. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Tue, 20 Mar 2018 00:00:00 Z<![CDATA[Angus Evers Grace Mitchell ]]><![CDATA[ Waste crime has been identified by the government as one of the most critical problems in the environmental sector. The government is, therefore, making efforts to tackle illegal waste management activity and, as part of that, is making changes to the law which could catch out landowners if they are not prepared. Landfill tax on illegal deposits of waste Avoiding landfill tax is one of the main drivers for illegal waste management activity, in particular fly-tipping. Illegal waste disposal sites that are not registered for landfill tax undercut legitimate landfill sites. However, from 1 April 2018 the landfill tax regime will be changing in England and Wales. The new changes will apply to both permitted and non-permitted landfill sites, but the tax rates will be different in England and Wales. Sites in England which operate without the necessary environmental permit will be liable for landfill tax at the standard rate (£88.95 per tonne) on all material. Sites in Wales which operate without the necessary environmental permit will be liable for landfill disposals tax (as the tax is to be known in Wales from 1 April 2018) at an unauthorised disposals rate of £133.45 per tonne (150% of the rate in England). All material at illegal sites on and after 1 April 2018 will be caught by the tax. Currently, certain material deposited at permitted sites is exempt from landfill tax, but the changes will disapply the exemptions for illegal sites so that all material deposited at them is taxable. Any person who deposits waste or knowingly permits the deposit of waste at an illegal site could become liable for landfill tax, in addition to facing a separate criminal prosecution for waste offences. HMRC will be able to charge an additional penalty of up to 100% of the tax due, and will also have the right to prosecute those who do not pay. New powers to require owners and occupiers of land to remove illegally stored waste From 9 May 2018 the Environment Agency, Natural Resources Wales and local authorities will all be able to serve a notice on the occupier of land requiring it to remove illegally stored waste, regardless of whether or not the waste was illegally deposited on the land in the first place. It will be a criminal offence to fail to comply with such a notice. Previously, regulators only had the power to require the removal of waste that had been illegally deposited. An unwelcome change for landowners is that if the land is unoccupied or the regulator cannot identify the occupier without incurring unreasonable expense, then the notice can be served on the landowner. Further, if a notice is served on the occupier and it fails to comply with the notice, or if it successfully appeals against a notice on the grounds that it didn't keep or deposit, or knowingly cause or knowingly permit, the keeping or deposit of the waste, then the regulator can serve a new notice on the owner of the land. What does this mean for landowners? Although the government has indicated that safeguards will be in place to ensure that landowners and waste producers who are unknowingly involved in illegal waste disposal activity will not be liable for the new landfill tax penalties, in practice it may be difficult for a landowner to prove that waste is not being stored illegally on a site where it was deposited lawfully, particularly where the occupier's permit has expired or been revoked, or where the occupier changes. Even if they are safeguarded against liability for landfill tax, landowners may still find themselves liable for the costs of removing waste brought on to their land lawfully, but subsequently stored illegally. The government has not undertaken any impact assessment of the likely costs to landowners in England, but the Welsh Government's impact assessment estimates that the costs to landowners of clearing waste from their land would be between £26,850 and £84,600. What can landowners do to protect themselves? Landowners should ensure greater due diligence is undertaken at the outset when considering potential tenants and other occupiers of their land who intend to use the land for waste management activities. Where occupiers are already in place, landowners should undertake a review of any environmental permits or exemptions they hold, in order to ensure that the site is operating lawfully and within the limits of any permit or exemption. Consideration should also be given to requiring occupiers undertaking waste management activities to provide a deposit or other security to the landowner, which the landowner can use if it incurs any liability to pay landfill tax or to remove waste from the land. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{FF67B323-E310-476E-9C2E-5AFBFF4886E2}https://www.shoosmiths.co.uk/client-resources/legal-updates/clean-green-growth-for-the-uk-13536.aspxClean, green growth for the UK The government has published two important papers on delivering clean economic growth and infrastructure. Together, they set out how the government intends to leverage private investment into sustainable infrastructure in order to achieve both decarbonisation goals and economic growth. The National Infrastructure Commission (NIC) has published a consultation on its National Infrastructure Assessment 'Congestion, Capacity, Carbon: Priorities for National Infrastructure', and the Department for Business, Energy & Industrial Strategy (BEIS) has published the 'Clean Growth Strategy'. Although published independently by different government bodies, there are many similarities between the two papers. The overall message is that if the UK fails to invest in its infrastructure with a modern, green approach in mind, then the country's economic growth will also be jeopardised. National Infrastructure Assessment (NIA) The NIA is an interim assessment to identify key priorities for consideration and consultation ahead of the publication of the National Infrastructure Strategy in 2018. It highlights the 'three Cs' - congestion, carbon and capacity as the key challenges for UK infrastructure growth. It warns that by 2050 the UK's population and economy will have grown significantly, placing substantial pressure on outdated infrastructure. It also warns that meeting the challenge of climate change will require transformations in energy generation and transport, and that UK infrastructure will need to adapt to the effects of climate change, such as increased risks of drought and flooding. Other environmental challenges needing to be addressed include air and water quality. The NIA sets out seven key priorities: Building a digital society: fast, reliable data services everywhere. Connected, liveable city-regions: linking homes and jobs. New homes and communities: supporting delivery of new homes. Low-cost, low-carbon: ending emissions from power, heat and waste. Revolutionising road transport: seizing the opportunities of electric and autonomous vehicles. Reducing the risks of extreme weather: making sure the UK can stand up to drought and flooding. Financing infrastructure in efficient ways: getting the right balance between public and private sectors. Smart systems are seen as having a key role in tackling the priorities, for example, improved digital transport signalling, water metering and remote monitoring. However, most emphasis is placed on increasing the rate of homebuilding, with housing described as 'the greatest infrastructure capacity challenge of all'. The NIA suggests that responsibility for delivering the ambitions set out in the NIA will fall on regulators such as Ofgem, Ofwat and Ofcom, and on the private sector. It states that 'Regulators are as important as Ministers' and notes that 'Britain's digital infrastructure is mainly the responsibility of Ofcom, the telecommunications regulator, not the government or parliament, with the investment required lying almost entirely with the private sector.' The consultation period for the NIA closes on 12 January 2018. Clean Growth Strategy (CGS) The CGS claims that it 'delivers on the challenge that Britain embraced when parliament passed the Climate Change Act' and that 'Achieving clean growth, while ensuring an affordable energy supply for businesses and consumers, is at the heart of the UK's Industrial Strategy.' Most importantly, however, there is a recognition by the government that economic growth and increased environmental protection are not incompatible. There are 50 key policies and proposals set out in the CGS, covering all sectors of the economy that contribute to the UK's carbon emissions. These are divided into eight broad categories: Accelerating Clean Growth - the CGS proposes developing world leading Green Finance capabilities. Improving business and industry efficiency (25% of UK emissions) - there are proposals to, among other things, consult on improving the energy efficiency of new and existing commercial buildings and on raising minimum standards of energy efficiency for rented commercial buildings, and to simplify business energy reporting requirements. Improving our homes (13% of UK emissions) - notably, there is an aspiration to develop a long term trajectory to improve the energy performance standards of privately-rented homes, with the aim of upgrading as many as possible to EPC Band C by 2030, where practical, cost-effective and affordable. Accelerating the shift to low carbon transport (24% of UK emissions) - most of the focus is on road transport, with the key new policy being to end the sale of new conventional petrol and diesel cars and vans by 2040. Surprisingly, there is no mention of air transport in these policies; the expansion of Heathrow gets only a passing mention in a Technical Annex. Delivering clean, smart, flexible power (21% of UK emissions) - there is a strong emphasis on reducing power costs, with the announcement of a draft bill to require Ofgem to impose a cap on standard variable and default tariffs. The previously-made commitment to phase out the use of unabated coal to produce electricity by 2025 is also repeated. Enhancing the benefits and value of our natural resources (15% of UK emissions) - the proposals include publishing a new 'Resources and Waste Strategy'. Leading in the public sector (2% of UK emissions) - £255 million of funding will be made available to public bodies in England for energy efficiency improvements. Public bodies will also be given help to access sources of funding. Government leadership in driving clean growth - there is an attempt to ensure joined-up policy-making through the creation of a 'Clean Growth Inter-Ministerial Group'. BEIS is seeking views, comments and suggestions on the CGS up until the end of December 2017. What are the implications of the NIA and CGS? In contrast to the NIA, the CGS puts figures on how investment is going to be spent to support the government's objectives, stating that '£2.5 billion will be invested by the government to support low carbon innovation from 2015 to 2021'. Whereas the NIA seems to be in place as a fact-finding exercise through consultation, in order to develop solutions to the priorities set out within it, the CGS seems to suggest that those solutions already exist, but just need to be implemented. It may be several years before we see legislation being brought forward to implement many of the proposals in the CGS, but at least some of the proposals set out a long-term trajectory to provide greater certainty for business. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Fri, 17 Nov 2017 00:00:00 Z<![CDATA[Angus Evers Grace Mitchell ]]><![CDATA[ The government has published two important papers on delivering clean economic growth and infrastructure. Together, they set out how the government intends to leverage private investment into sustainable infrastructure in order to achieve both decarbonisation goals and economic growth. The National Infrastructure Commission (NIC) has published a consultation on its National Infrastructure Assessment 'Congestion, Capacity, Carbon: Priorities for National Infrastructure', and the Department for Business, Energy & Industrial Strategy (BEIS) has published the 'Clean Growth Strategy'. Although published independently by different government bodies, there are many similarities between the two papers. The overall message is that if the UK fails to invest in its infrastructure with a modern, green approach in mind, then the country's economic growth will also be jeopardised. National Infrastructure Assessment (NIA) The NIA is an interim assessment to identify key priorities for consideration and consultation ahead of the publication of the National Infrastructure Strategy in 2018. It highlights the 'three Cs' - congestion, carbon and capacity as the key challenges for UK infrastructure growth. It warns that by 2050 the UK's population and economy will have grown significantly, placing substantial pressure on outdated infrastructure. It also warns that meeting the challenge of climate change will require transformations in energy generation and transport, and that UK infrastructure will need to adapt to the effects of climate change, such as increased risks of drought and flooding. Other environmental challenges needing to be addressed include air and water quality. The NIA sets out seven key priorities: Building a digital society: fast, reliable data services everywhere. Connected, liveable city-regions: linking homes and jobs. New homes and communities: supporting delivery of new homes. Low-cost, low-carbon: ending emissions from power, heat and waste. Revolutionising road transport: seizing the opportunities of electric and autonomous vehicles. Reducing the risks of extreme weather: making sure the UK can stand up to drought and flooding. Financing infrastructure in efficient ways: getting the right balance between public and private sectors. Smart systems are seen as having a key role in tackling the priorities, for example, improved digital transport signalling, water metering and remote monitoring. However, most emphasis is placed on increasing the rate of homebuilding, with housing described as 'the greatest infrastructure capacity challenge of all'. The NIA suggests that responsibility for delivering the ambitions set out in the NIA will fall on regulators such as Ofgem, Ofwat and Ofcom, and on the private sector. It states that 'Regulators are as important as Ministers' and notes that 'Britain's digital infrastructure is mainly the responsibility of Ofcom, the telecommunications regulator, not the government or parliament, with the investment required lying almost entirely with the private sector.' The consultation period for the NIA closes on 12 January 2018. Clean Growth Strategy (CGS) The CGS claims that it 'delivers on the challenge that Britain embraced when parliament passed the Climate Change Act' and that 'Achieving clean growth, while ensuring an affordable energy supply for businesses and consumers, is at the heart of the UK's Industrial Strategy.' Most importantly, however, there is a recognition by the government that economic growth and increased environmental protection are not incompatible. There are 50 key policies and proposals set out in the CGS, covering all sectors of the economy that contribute to the UK's carbon emissions. These are divided into eight broad categories: Accelerating Clean Growth - the CGS proposes developing world leading Green Finance capabilities. Improving business and industry efficiency (25% of UK emissions) - there are proposals to, among other things, consult on improving the energy efficiency of new and existing commercial buildings and on raising minimum standards of energy efficiency for rented commercial buildings, and to simplify business energy reporting requirements. Improving our homes (13% of UK emissions) - notably, there is an aspiration to develop a long term trajectory to improve the energy performance standards of privately-rented homes, with the aim of upgrading as many as possible to EPC Band C by 2030, where practical, cost-effective and affordable. Accelerating the shift to low carbon transport (24% of UK emissions) - most of the focus is on road transport, with the key new policy being to end the sale of new conventional petrol and diesel cars and vans by 2040. Surprisingly, there is no mention of air transport in these policies; the expansion of Heathrow gets only a passing mention in a Technical Annex. Delivering clean, smart, flexible power (21% of UK emissions) - there is a strong emphasis on reducing power costs, with the announcement of a draft bill to require Ofgem to impose a cap on standard variable and default tariffs. The previously-made commitment to phase out the use of unabated coal to produce electricity by 2025 is also repeated. Enhancing the benefits and value of our natural resources (15% of UK emissions) - the proposals include publishing a new 'Resources and Waste Strategy'. Leading in the public sector (2% of UK emissions) - £255 million of funding will be made available to public bodies in England for energy efficiency improvements. Public bodies will also be given help to access sources of funding. Government leadership in driving clean growth - there is an attempt to ensure joined-up policy-making through the creation of a 'Clean Growth Inter-Ministerial Group'. BEIS is seeking views, comments and suggestions on the CGS up until the end of December 2017. What are the implications of the NIA and CGS? In contrast to the NIA, the CGS puts figures on how investment is going to be spent to support the government's objectives, stating that '£2.5 billion will be invested by the government to support low carbon innovation from 2015 to 2021'. Whereas the NIA seems to be in place as a fact-finding exercise through consultation, in order to develop solutions to the priorities set out within it, the CGS seems to suggest that those solutions already exist, but just need to be implemented. It may be several years before we see legislation being brought forward to implement many of the proposals in the CGS, but at least some of the proposals set out a long-term trajectory to provide greater certainty for business. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{B35A7F8A-C107-44FD-911F-80BB4FA9869C}https://www.shoosmiths.co.uk/client-resources/legal-updates/drafting-an-anti-slavery-statement-what-not-to-do-13490.aspxDrafting an Anti-Slavery Statement: What not to do When preparing your company's Modern Slavery Act 2015 (the Act) statement, it can be hard to know where to start. This article sets out a few things you should consider, and what we can expect going forward. Now that numerous organisations have published statements, a report by consultancy Ergon Associates has considered trends within 150 of these statements. This report highlights several pitfalls that should be avoided going forward and we have summarised the key issues below. 1. Don't forget the contractors: Ergon's report found that while the majority of organisations were very good at considering the risk of modern slavery within their supply chain, a surprisingly small number of published statements adequately considered their contractors - over half did not discuss them at all. What to do: Many organisations rely heavily on a variety of contractors to fill gaps within their businesses, and such contractors undeniably pose risks, temporary labour provided by third party agencies in particular. Organisations will not have the same level of control over contractors as their own employees, but you should ensure staff responsible for the recruitment of contractors that work with third party recruitment agencies are trained how to recognise modern slavery and what to do if they suspect it is occurring. 2. No company works in a vacuum - collaboration and stakeholder engagement: Less than a quarter of statements reviewed by Ergon mentioned membership of a cross-industry or sector specific group committed to working to promote respect for workers' rights worldwide. What to do: Consider whether your company would benefit from collaborating with groups such as Sedex, The Ethical Trading Initiative and Stronger Together who all provide services to organisations to assist in encouraging ethical practices within their supply chains, including training, auditing, and risk assessment. In addition to these, you could join or create a sector-specific group such as The Better Cotton Initiative, or the Ethical Tea Partnership. Beyond the tangible services these groups can provide, they also offer opportunities for knowledge sharing, which can be invaluable when dealing with this relatively uncharted area. 3. Measuring performance - KPIs are key: Less than 20% of statements reviewed by Ergon discussed any mechanisms by which the success (or otherwise) of approaches to tackling modern slavery will be measured. What to do: The Act requires organisations to publish a new statement every year, the intention being for them to develop their approach to combating modern slavery, and for the statements to track this ongoing process. In order to fully engage with the legislation, you should think about how you assess and measure the effectiveness of your company's strategies. These KPIs can include both qualitative and quantitative measurement categories, and the more detail that you can include in your company's statements the better. You should also consider auditing your company's on their performance against such KPIs and compliance with the Act. 4. Administrative compliance - remember the basics: Ergon discovered that a surprisingly large number of statements did not meet the legislative requirements for publishing a statement. What to do: Organisations should be aware of the following key requirements under the Act: All organisations doing business in the UK with a turnover of over £36 million are required to publish a statement every year. The statement must be approved by the board of directors (or equivalent) and signed by a director (or equivalent). The statement should also include the director's name and position, and the date the statement was approved by the board (or equivalent). The statement must be published on the company's website and linked directly from its home-page. If the company does not have a website, a copy must be made available to anyone requesting it within 30 days of the company receiving the request. The Future A bill to amend the Act (The Modern Slavery (Transparency in Supply Chains) Bill 2017) had its first reading in the House of Lords earlier this year. Changes proposed by the bill include mandating what content should appear in organisations' statements, as well as giving public bodies more power to reject tenders by organisations without compliant statements. Coming just over a year after the transitional provisions of the Act came into force, this bill is a statement of intent by the government and a timely reminder for organisations to consider what they should be doing to comply with the Act. While section 54 of the Act currently has very few legislative teeth, non-governmental organisations and investors are being encouraged to put commercial pressure on companies that produce inadequate statements, and there have been calls in the House of Lords for tougher rules to encourage compliance. Shoosmiths has broad experience in assisting companies in complying with the Act, including drafting statements, advising on supply chain issues, drafting policies and updating template contracts. Shoosmiths also has a range of e-learning courses and bespoke training available, details of which can be found here. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Thu, 02 Nov 2017 00:00:00 Z<![CDATA[Andy Pratley ]]><![CDATA[ When preparing your company's Modern Slavery Act 2015 (the Act) statement, it can be hard to know where to start. This article sets out a few things you should consider, and what we can expect going forward. Now that numerous organisations have published statements, a report by consultancy Ergon Associates has considered trends within 150 of these statements. This report highlights several pitfalls that should be avoided going forward and we have summarised the key issues below. 1. Don't forget the contractors: Ergon's report found that while the majority of organisations were very good at considering the risk of modern slavery within their supply chain, a surprisingly small number of published statements adequately considered their contractors - over half did not discuss them at all. What to do: Many organisations rely heavily on a variety of contractors to fill gaps within their businesses, and such contractors undeniably pose risks, temporary labour provided by third party agencies in particular. Organisations will not have the same level of control over contractors as their own employees, but you should ensure staff responsible for the recruitment of contractors that work with third party recruitment agencies are trained how to recognise modern slavery and what to do if they suspect it is occurring. 2. No company works in a vacuum - collaboration and stakeholder engagement: Less than a quarter of statements reviewed by Ergon mentioned membership of a cross-industry or sector specific group committed to working to promote respect for workers' rights worldwide. What to do: Consider whether your company would benefit from collaborating with groups such as Sedex, The Ethical Trading Initiative and Stronger Together who all provide services to organisations to assist in encouraging ethical practices within their supply chains, including training, auditing, and risk assessment. In addition to these, you could join or create a sector-specific group such as The Better Cotton Initiative, or the Ethical Tea Partnership. Beyond the tangible services these groups can provide, they also offer opportunities for knowledge sharing, which can be invaluable when dealing with this relatively uncharted area. 3. Measuring performance - KPIs are key: Less than 20% of statements reviewed by Ergon discussed any mechanisms by which the success (or otherwise) of approaches to tackling modern slavery will be measured. What to do: The Act requires organisations to publish a new statement every year, the intention being for them to develop their approach to combating modern slavery, and for the statements to track this ongoing process. In order to fully engage with the legislation, you should think about how you assess and measure the effectiveness of your company's strategies. These KPIs can include both qualitative and quantitative measurement categories, and the more detail that you can include in your company's statements the better. You should also consider auditing your company's on their performance against such KPIs and compliance with the Act. 4. Administrative compliance - remember the basics: Ergon discovered that a surprisingly large number of statements did not meet the legislative requirements for publishing a statement. What to do: Organisations should be aware of the following key requirements under the Act: All organisations doing business in the UK with a turnover of over £36 million are required to publish a statement every year. The statement must be approved by the board of directors (or equivalent) and signed by a director (or equivalent). The statement should also include the director's name and position, and the date the statement was approved by the board (or equivalent). The statement must be published on the company's website and linked directly from its home-page. If the company does not have a website, a copy must be made available to anyone requesting it within 30 days of the company receiving the request. The Future A bill to amend the Act (The Modern Slavery (Transparency in Supply Chains) Bill 2017) had its first reading in the House of Lords earlier this year. Changes proposed by the bill include mandating what content should appear in organisations' statements, as well as giving public bodies more power to reject tenders by organisations without compliant statements. Coming just over a year after the transitional provisions of the Act came into force, this bill is a statement of intent by the government and a timely reminder for organisations to consider what they should be doing to comply with the Act. While section 54 of the Act currently has very few legislative teeth, non-governmental organisations and investors are being encouraged to put commercial pressure on companies that produce inadequate statements, and there have been calls in the House of Lords for tougher rules to encourage compliance. Shoosmiths has broad experience in assisting companies in complying with the Act, including drafting statements, advising on supply chain issues, drafting policies and updating template contracts. Shoosmiths also has a range of e-learning courses and bespoke training available, details of which can be found here. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{EB02F700-69F5-4DB7-976E-B5B4E37E545D}https://www.shoosmiths.co.uk/client-resources/legal-updates/hse-makes-ffi-invoice-dispute-procedure-independent-13370.aspxHSE makes FFI invoice dispute procedure fully independent The HSE has announced that all invoice disputes raised under the Fees for Intervention (FFI) scheme will be considered by a fully independent panel. Background In October 2012, the HSE was granted the statutory power to recover their costs from those in material breach of health and safety law. As a result, the FFI scheme was launched. A material breach is deemed to have occurred where "there is or has been a contravention of health and safety law that requires the HSE to issue notice in writing to the duty holder". Under the FFI scheme, the HSE charges an hourly rate of £129. The tasks they charge for range from identifying the breach to taking specialist advice. Invoices are raised every two months and they must be paid within 30 days. Update to Disputes Procedure Any organisation that wants to challenge an invoice has to follow the FFI dispute procedure. Since the introduction of FFI, this procedure involved the dispute being considered by a panel of two HSE members and one independent person. As you can imagine, there has been much debate as to the independent status of such a panel. Following a lengthy consultation, the HSE has now announced that all disputed invoices will be considered by a fully independent panel. This will be made up of a lawyer and two others who have practical experience of management of health and safety. HSE members will no longer be able to sit on the panel. The move to a totally independent panel is encouraging and will ensure that all disputes are reviewed from an impartial and unbiased perspective. Warning It is important to consider fully the implications of a FFI invoice before accepting and paying it. While we appreciate there may be commercial reasons as to why it is more cost effective to pay an invoice rather than appeal it, it is important to consider the legal and reputational implications before doing so. Acceptance of an invoice may be seen as an acceptance of guilt, which can have adverse implications if the HSE choose to take further enforcement action and prosecute. The recent change to the FFI dispute panel is positive for organisations who choose to dispute their invoices. If you have received an invoice relating to FFI and are unsure whether to dispute it or not, contact us and we will be happy to discuss your options. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Wed, 04 Oct 2017 00:00:00 +0100<![CDATA[Hayley Saunders Roy Tozer ]]><![CDATA[ The HSE has announced that all invoice disputes raised under the Fees for Intervention (FFI) scheme will be considered by a fully independent panel. Background In October 2012, the HSE was granted the statutory power to recover their costs from those in material breach of health and safety law. As a result, the FFI scheme was launched. A material breach is deemed to have occurred where "there is or has been a contravention of health and safety law that requires the HSE to issue notice in writing to the duty holder". Under the FFI scheme, the HSE charges an hourly rate of £129. The tasks they charge for range from identifying the breach to taking specialist advice. Invoices are raised every two months and they must be paid within 30 days. Update to Disputes Procedure Any organisation that wants to challenge an invoice has to follow the FFI dispute procedure. Since the introduction of FFI, this procedure involved the dispute being considered by a panel of two HSE members and one independent person. As you can imagine, there has been much debate as to the independent status of such a panel. Following a lengthy consultation, the HSE has now announced that all disputed invoices will be considered by a fully independent panel. This will be made up of a lawyer and two others who have practical experience of management of health and safety. HSE members will no longer be able to sit on the panel. The move to a totally independent panel is encouraging and will ensure that all disputes are reviewed from an impartial and unbiased perspective. Warning It is important to consider fully the implications of a FFI invoice before accepting and paying it. While we appreciate there may be commercial reasons as to why it is more cost effective to pay an invoice rather than appeal it, it is important to consider the legal and reputational implications before doing so. Acceptance of an invoice may be seen as an acceptance of guilt, which can have adverse implications if the HSE choose to take further enforcement action and prosecute. The recent change to the FFI dispute panel is positive for organisations who choose to dispute their invoices. If you have received an invoice relating to FFI and are unsure whether to dispute it or not, contact us and we will be happy to discuss your options. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{5358B04F-D717-4C43-A6D4-27A192E5D995}https://www.shoosmiths.co.uk/client-resources/legal-updates/corporate-offence-failure-prevent-facilitation-tax-evasion-13344.aspxNew corporate offences introduced: Failure to prevent the facilitation of tax evasion The new corporate offences of 'failure to prevent the facilitation of tax evasion' under the Criminal Finances Act 2017 came into effect on 30 September 2017. These offences widen the existing regime by introducing strict liability offences for companies who do not have adequate prevention procedures in place. The new offences are part of the government's wider aim to combat tax evasion and tackle the perceived corporate culture of turning a blind eye to tax related offences. Under the previous regime, senior members of a company (such as board directors) had to be aware that illegal tax evasion activities were taking place in order for companies to be found criminally liable. However, under the new legislation, companies may be criminally liable even if they do not have actual knowledge of the illegal activity being committed. Two new offences are introduced. Failure to prevent facilitation of UK tax evasion The Criminal Finances Act 2017 (the "Act") introduces a strict liability offence for companies (and partnerships) if a person commits a UK tax evasion facilitation offence when acting in the capacity of a person associated with the company and the company fails to prevent this. Associated person - is defined widely under the act. It not only covers employees of the company, but also agents or any other person or entity who performs services on behalf of the company, such as out-sourced service providers and sub-contractors. UK tax evasion facilitation offence - the associated person must have committed an offence of facilitation of tax evasion. This offence is made up of: Criminal tax evasion by a third party taxpayer (either an individual or a corporate entity). Tax evasion comprises the offence of cheating the public revenue or any other UK offence of fraudulently evading tax; The associated person deliberately and dishonestly facilitating the tax payer to evade tax. For example, a lawyer or accountant acting in their capacity as a person associated with the company drafts documents to deliberately aid the third party to evade tax. The facilitation must be deliberate or dishonest - if the associated person was negligent or was not aware they were facilitating tax evasion then no offence is committed. Failure to prevent the offence - As the offence is one of strict liability, if the company's employee, agent or other associated person has deliberately and dishonestly facilitated the evasion of tax by a third party, then the relevant company is guilty of the offence, unless it can prove the existence of reasonable prevention procedures Failure to prevent facilitation of foreign tax evasion The act also introduces the offence of failing to prevent facilitation of overseas tax fraud, which is broadly the same as the UK offence but is narrower in scope - the offence only applies if: The relevant body who failed to prevent the facilitation offence has a 'UK Nexus', meaning it is (i) a UK incorporated company; (ii) an overseas company with a branch located in the UK; or (iii) an overseas company whose associated person is located within the UK at the time they criminally facilitate the evasion of foreign tax. There is 'dual criminality', meaning that both the tax evasion and the facilitation must constitute criminal offences in the UK and in the foreign jurisdiction. The foreign jurisdiction must have equivalent offences at the tax-payer and facilitator level, conversely if the foreign jurisdiction takes a particularly strict approach and criminalises activity that is not illegal in the UK then no offence is committed. Steps your business should take reasonable prevention procedures In a similar vein to the Bribery Act 2010, the only defence to these strict liability offences is the implementation of reasonable prevention procedures to prevent the criminal facilitation of tax evasion by an associated person (except where it is unreasonable to expect such procedures to be in place). The government guidance published on 1 September 2017 suggests that companies should: Conduct a risk assessment of their domestic and international business to ascertain who its associated persons are and if any of these pose a risk of facilitating tax evasion. Companies exposed to high risk are encouraged to undertake more extensive due diligence - such companies may include those undertaking transactions in countries which lack adequate anti-corruption and money laundering legislation, or a tax advisory businesses engaging in complex tax planning structures. Implement reasonable preventative procedures. What is reasonable will depend on the level of risk the company is exposed to, as well as the size, complexity and scale of the business's activities. Examples of procedures will include the introduction of internal and external training and communication programmes so that policies and procedures are understood throughout the organisation, the introduction of self-reporting and whistleblowing procedures and an active management commitment to foster a zero tolerance culture. Monitor and review internal procedures on an on-going basis. Companies may wish to review existing contracts with third party 'associated persons'. Penalties for non-compliance Companies found guilty of either of the offences may be required to pay an unlimited fine. Our lawyers are experienced in all aspects of corporate compliance. If you wish to understand the impact of the regulations on your business or require legal advice please contact Dan Stowers in the regulatory team or Kate Featherstone in the tax team who will be happy to assist. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Mon, 02 Oct 2017 00:00:00 +0100<![CDATA[Dan Stowers Kate Featherstone ]]><![CDATA[ The new corporate offences of 'failure to prevent the facilitation of tax evasion' under the Criminal Finances Act 2017 came into effect on 30 September 2017. These offences widen the existing regime by introducing strict liability offences for companies who do not have adequate prevention procedures in place. The new offences are part of the government's wider aim to combat tax evasion and tackle the perceived corporate culture of turning a blind eye to tax related offences. Under the previous regime, senior members of a company (such as board directors) had to be aware that illegal tax evasion activities were taking place in order for companies to be found criminally liable. However, under the new legislation, companies may be criminally liable even if they do not have actual knowledge of the illegal activity being committed. Two new offences are introduced. Failure to prevent facilitation of UK tax evasion The Criminal Finances Act 2017 (the "Act") introduces a strict liability offence for companies (and partnerships) if a person commits a UK tax evasion facilitation offence when acting in the capacity of a person associated with the company and the company fails to prevent this. Associated person - is defined widely under the act. It not only covers employees of the company, but also agents or any other person or entity who performs services on behalf of the company, such as out-sourced service providers and sub-contractors. UK tax evasion facilitation offence - the associated person must have committed an offence of facilitation of tax evasion. This offence is made up of: Criminal tax evasion by a third party taxpayer (either an individual or a corporate entity). Tax evasion comprises the offence of cheating the public revenue or any other UK offence of fraudulently evading tax; The associated person deliberately and dishonestly facilitating the tax payer to evade tax. For example, a lawyer or accountant acting in their capacity as a person associated with the company drafts documents to deliberately aid the third party to evade tax. The facilitation must be deliberate or dishonest - if the associated person was negligent or was not aware they were facilitating tax evasion then no offence is committed. Failure to prevent the offence - As the offence is one of strict liability, if the company's employee, agent or other associated person has deliberately and dishonestly facilitated the evasion of tax by a third party, then the relevant company is guilty of the offence, unless it can prove the existence of reasonable prevention procedures Failure to prevent facilitation of foreign tax evasion The act also introduces the offence of failing to prevent facilitation of overseas tax fraud, which is broadly the same as the UK offence but is narrower in scope - the offence only applies if: The relevant body who failed to prevent the facilitation offence has a 'UK Nexus', meaning it is (i) a UK incorporated company; (ii) an overseas company with a branch located in the UK; or (iii) an overseas company whose associated person is located within the UK at the time they criminally facilitate the evasion of foreign tax. There is 'dual criminality', meaning that both the tax evasion and the facilitation must constitute criminal offences in the UK and in the foreign jurisdiction. The foreign jurisdiction must have equivalent offences at the tax-payer and facilitator level, conversely if the foreign jurisdiction takes a particularly strict approach and criminalises activity that is not illegal in the UK then no offence is committed. Steps your business should take reasonable prevention procedures In a similar vein to the Bribery Act 2010, the only defence to these strict liability offences is the implementation of reasonable prevention procedures to prevent the criminal facilitation of tax evasion by an associated person (except where it is unreasonable to expect such procedures to be in place). The government guidance published on 1 September 2017 suggests that companies should: Conduct a risk assessment of their domestic and international business to ascertain who its associated persons are and if any of these pose a risk of facilitating tax evasion. Companies exposed to high risk are encouraged to undertake more extensive due diligence - such companies may include those undertaking transactions in countries which lack adequate anti-corruption and money laundering legislation, or a tax advisory businesses engaging in complex tax planning structures. Implement reasonable preventative procedures. What is reasonable will depend on the level of risk the company is exposed to, as well as the size, complexity and scale of the business's activities. Examples of procedures will include the introduction of internal and external training and communication programmes so that policies and procedures are understood throughout the organisation, the introduction of self-reporting and whistleblowing procedures and an active management commitment to foster a zero tolerance culture. Monitor and review internal procedures on an on-going basis. Companies may wish to review existing contracts with third party 'associated persons'. Penalties for non-compliance Companies found guilty of either of the offences may be required to pay an unlimited fine. Our lawyers are experienced in all aspects of corporate compliance. If you wish to understand the impact of the regulations on your business or require legal advice please contact Dan Stowers in the regulatory team or Kate Featherstone in the tax team who will be happy to assist. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{1931C80D-A712-4B02-993F-40D225FDF4D0}https://www.shoosmiths.co.uk/client-resources/legal-updates/uncertainty-ahead-for-the-contaminated-land-regime-13033.aspxUncertainty ahead for the contaminated land regime? A successful appeal against a remediation notice has highlighted the difficulties faced by local authorities when trying to secure the remediation of contaminated land. The appeal is only the second appeal to the Secretary of State for Environment, Food and Rural Affairs (SoS) since the contaminated land regime in Part 2A of the Environmental Protection Act 1990 was implemented in 2000. Background The Part 2A regime requires local authorities to identify land that meets the criteria for designation as 'contaminated land' and, where remediation cannot be procured voluntarily, to serve a 'remediation notice' on the person(s) responsible (who are known as 'appropriate persons'). This is usually those who have caused or knowingly permitted contamination, but where they cannot be identified, then it is the current owner/occupier. An appropriate person may escape liability through the application of a series of 'exclusion tests'. If served with a remediation notice, an appropriate person may appeal to the SoS, as in this case. Prior to 1957 a gasworks operated in Willenhall, West Midlands. McLean Homes (subsequently renamed Jim 2 Limited) bought the site from Walsall Metropolitan Borough Council (WMBC) in 1972, with planning permission for residential development. Part of the site was sold to another developer in 1972 and the two developers built approximately 90 homes. In 2007, WMBC investigated the site under its contaminated land strategy. In 2012 WMBC determined that land within two zones was 'contaminated land' owing to the presence of benzo(a)pyrene (BaP), a known carcinogen that posed a 'significant possibility of significant harm'. WMBC considered Jim 2 to be the 'appropriate person' for remediation and served Jim 2 with a remediation notice in March 2012. Jim 2 appealed against the notice and the appeal was heard at a public inquiry by an Inspector appointed by the SoS. The SoS's decision The SoS issued her decision in April 2017. Agreeing with recommendations detailed in the Inspector's report, she allowed the appeal, quashing the remediation notice. Although the parties agreed that the BaP posed a possibility of significant harm, WMBC's risk assessment had not been based on sound science and had failed to demonstrate that there was a 'significant' possibility of significant harm. WMBC's identification of the land as 'contaminated land' was therefore unreasonable. Since the remediation notice was quashed on the first ground of appeal, the SoS did not need to consider Jim 2's other grounds of appeal. However, she helpfully did so, in order to assist understanding of what approach should be taken towards relevant guidance and legislation. Although not binding precedent, the decision provides useful insight, given the rarity of appeal decisions. The SoS's key findings were: 'Causing or knowingly permitting' contamination means a person must cause or knowingly permit the specific substance that causes contamination, rather than contamination generally. 'Knowingly permitting' requires: knowledge of a substance's presence, power to remove it, the opportunity to exercise that power and a failure to do so. The site was not 'sold with information' by WMBC to Jim 2. An acknowledgement in the sale contract that parts of the site might be unsuitable for building was insufficient to give Jim 2 knowledge of the presence of BaP. However, Jim 2 subsequently acquired such knowledge and became a 'knowing permitter'. The Inspector's report and SoS's decision letter provide the first proper analysis of the little known 'Exclusion Test 6' in the statutory guidance - 'introduction of pathways or receptors'. Original causers or knowing permitters can be excluded from liability where a subsequent owner introduces new pathways or receptors. The Inspector's report and SoS's decision letter both stated that the gasworks operators would have been excluded from liability under this test, if still in existence. Key lessons It is now questionable whether the site will be remediated and, if so, who will remediate it. The site is contaminated in the ordinary sense and the parties to the appeal all agreed that it poses a risk of significant harm to residents, even if the SoS concluded that it did not reach the high threshold to be classified as 'contaminated land' under the Part 2A regime. This decision is arguably positive for historic polluters who have sold contaminated sites that have subsequently been redeveloped, but it may be problematic for developers who have introduced new pathways or receptors onto sites. It also raises the question of whether any other local authorities will have the political will and resources to serve a remediation notice, given the strong likelihood of an appeal. Sellers of property may also wish to revisit any 'sold with information' wording they use in sale contracts and to consider the application of Exclusion Test 6 when selling to developers, in the light of the SoS's findings. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Thu, 13 Jul 2017 00:00:00 +0100<![CDATA[Angus Evers ]]><![CDATA[ A successful appeal against a remediation notice has highlighted the difficulties faced by local authorities when trying to secure the remediation of contaminated land. The appeal is only the second appeal to the Secretary of State for Environment, Food and Rural Affairs (SoS) since the contaminated land regime in Part 2A of the Environmental Protection Act 1990 was implemented in 2000. Background The Part 2A regime requires local authorities to identify land that meets the criteria for designation as 'contaminated land' and, where remediation cannot be procured voluntarily, to serve a 'remediation notice' on the person(s) responsible (who are known as 'appropriate persons'). This is usually those who have caused or knowingly permitted contamination, but where they cannot be identified, then it is the current owner/occupier. An appropriate person may escape liability through the application of a series of 'exclusion tests'. If served with a remediation notice, an appropriate person may appeal to the SoS, as in this case. Prior to 1957 a gasworks operated in Willenhall, West Midlands. McLean Homes (subsequently renamed Jim 2 Limited) bought the site from Walsall Metropolitan Borough Council (WMBC) in 1972, with planning permission for residential development. Part of the site was sold to another developer in 1972 and the two developers built approximately 90 homes. In 2007, WMBC investigated the site under its contaminated land strategy. In 2012 WMBC determined that land within two zones was 'contaminated land' owing to the presence of benzo(a)pyrene (BaP), a known carcinogen that posed a 'significant possibility of significant harm'. WMBC considered Jim 2 to be the 'appropriate person' for remediation and served Jim 2 with a remediation notice in March 2012. Jim 2 appealed against the notice and the appeal was heard at a public inquiry by an Inspector appointed by the SoS. The SoS's decision The SoS issued her decision in April 2017. Agreeing with recommendations detailed in the Inspector's report, she allowed the appeal, quashing the remediation notice. Although the parties agreed that the BaP posed a possibility of significant harm, WMBC's risk assessment had not been based on sound science and had failed to demonstrate that there was a 'significant' possibility of significant harm. WMBC's identification of the land as 'contaminated land' was therefore unreasonable. Since the remediation notice was quashed on the first ground of appeal, the SoS did not need to consider Jim 2's other grounds of appeal. However, she helpfully did so, in order to assist understanding of what approach should be taken towards relevant guidance and legislation. Although not binding precedent, the decision provides useful insight, given the rarity of appeal decisions. The SoS's key findings were: 'Causing or knowingly permitting' contamination means a person must cause or knowingly permit the specific substance that causes contamination, rather than contamination generally. 'Knowingly permitting' requires: knowledge of a substance's presence, power to remove it, the opportunity to exercise that power and a failure to do so. The site was not 'sold with information' by WMBC to Jim 2. An acknowledgement in the sale contract that parts of the site might be unsuitable for building was insufficient to give Jim 2 knowledge of the presence of BaP. However, Jim 2 subsequently acquired such knowledge and became a 'knowing permitter'. The Inspector's report and SoS's decision letter provide the first proper analysis of the little known 'Exclusion Test 6' in the statutory guidance - 'introduction of pathways or receptors'. Original causers or knowing permitters can be excluded from liability where a subsequent owner introduces new pathways or receptors. The Inspector's report and SoS's decision letter both stated that the gasworks operators would have been excluded from liability under this test, if still in existence. Key lessons It is now questionable whether the site will be remediated and, if so, who will remediate it. The site is contaminated in the ordinary sense and the parties to the appeal all agreed that it poses a risk of significant harm to residents, even if the SoS concluded that it did not reach the high threshold to be classified as 'contaminated land' under the Part 2A regime. This decision is arguably positive for historic polluters who have sold contaminated sites that have subsequently been redeveloped, but it may be problematic for developers who have introduced new pathways or receptors onto sites. It also raises the question of whether any other local authorities will have the political will and resources to serve a remediation notice, given the strong likelihood of an appeal. Sellers of property may also wish to revisit any 'sold with information' wording they use in sale contracts and to consider the application of Exclusion Test 6 when selling to developers, in the light of the SoS's findings. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{21F3189F-2B05-483F-8893-F9DD7D9D0351}https://www.shoosmiths.co.uk/client-resources/legal-updates/new-sentencing-guidelines-for-manslaughter-offences-13015.aspxNew Sentencing Guidelines for Manslaughter Offences On the 4 July 2017, the Sentencing Council announced a consultation on its proposals for how offenders convicted of manslaughter should be sentenced in England and Wales. There are no other existing guidelines for any other forms of manslaughter except Corporate Manslaughter which is covered by the Sentencing Guideline covering Corporate Manslaughter, Health and Safety and Food Safety and Hygiene offences that came into force in February last year. The proposed guidelines are based on an analysis of current sentencing practice, and in most areas, there are unlikely to be changes to sentence levels, but the Council expects that in some gross negligence cases, sentences will increase. An example could be in a health and safety case where a death was caused by an employer's long-standing and serious disregard for the safety of employees which was motivated by cost-cutting. Current sentencing practice in these sorts of cases is lower in the context of overall sentence levels for manslaughter than for other types. Gross negligence manslaughter, almost more than any other type of offending, covers an extraordinarily wide set of scenarios. To try and cater adequately for that in a single (and very brief) Sentencing Guideline may be a very difficult exercise. The formulaic approach set out in the draft might serve to significantly restrict the traditional flexibility enjoyed by Judges to deal with each case, especially health and safety cases, on its unique facts. It might be more sensible for deaths arising out of or in connection with work related activities to be separated out of this draft Guideline and dealt with separately, to sit with and dovetail the existing and recent Sentencing Guideline covering Corporate Manslaughter, Health and Safety and Food Safety and Hygiene offences. In that way the various factors addressing culpability, aggravation and mitigation might be more readily tailored to this type of offending. As set out in the current draft the applicability of the various factors to work-related deaths appears somewhat limited. The draft Guideline certainly appears, looked at in the context of its potential impact on gross negligence manslaughter prosecutions in the health and safety sphere, to be a continuation of the trend of the last decade or so towards trying to significantly increase the consequences faced by both businesses and employees (of whatever seniority) of getting compliance wrong in this crucially important area of public protection. In recent years there has been an increase in the number of individuals prosecuted for health and safety offences and gross negligence manslaughter. The reported cases also appear to show a noticeable increase over the last few years of individuals receiving custodial sentences for such offending and an increase in the length of such sentences. This Guideline, read in conjunction with the Guideline for individuals committing health and safety offences, suggests that those periods of custody will, on average, continue to get longer. This can be found on the following link: https://www.sentencingcouncil.org.uk/consultations/manslaughter-consultation/ DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Tue, 11 Jul 2017 00:00:00 +0100<![CDATA[Hayley Saunders Charles Arrand ]]><![CDATA[ On the 4 July 2017, the Sentencing Council announced a consultation on its proposals for how offenders convicted of manslaughter should be sentenced in England and Wales. There are no other existing guidelines for any other forms of manslaughter except Corporate Manslaughter which is covered by the Sentencing Guideline covering Corporate Manslaughter, Health and Safety and Food Safety and Hygiene offences that came into force in February last year. The proposed guidelines are based on an analysis of current sentencing practice, and in most areas, there are unlikely to be changes to sentence levels, but the Council expects that in some gross negligence cases, sentences will increase. An example could be in a health and safety case where a death was caused by an employer's long-standing and serious disregard for the safety of employees which was motivated by cost-cutting. Current sentencing practice in these sorts of cases is lower in the context of overall sentence levels for manslaughter than for other types. Gross negligence manslaughter, almost more than any other type of offending, covers an extraordinarily wide set of scenarios. To try and cater adequately for that in a single (and very brief) Sentencing Guideline may be a very difficult exercise. The formulaic approach set out in the draft might serve to significantly restrict the traditional flexibility enjoyed by Judges to deal with each case, especially health and safety cases, on its unique facts. It might be more sensible for deaths arising out of or in connection with work related activities to be separated out of this draft Guideline and dealt with separately, to sit with and dovetail the existing and recent Sentencing Guideline covering Corporate Manslaughter, Health and Safety and Food Safety and Hygiene offences. In that way the various factors addressing culpability, aggravation and mitigation might be more readily tailored to this type of offending. As set out in the current draft the applicability of the various factors to work-related deaths appears somewhat limited. The draft Guideline certainly appears, looked at in the context of its potential impact on gross negligence manslaughter prosecutions in the health and safety sphere, to be a continuation of the trend of the last decade or so towards trying to significantly increase the consequences faced by both businesses and employees (of whatever seniority) of getting compliance wrong in this crucially important area of public protection. In recent years there has been an increase in the number of individuals prosecuted for health and safety offences and gross negligence manslaughter. The reported cases also appear to show a noticeable increase over the last few years of individuals receiving custodial sentences for such offending and an increase in the length of such sentences. This Guideline, read in conjunction with the Guideline for individuals committing health and safety offences, suggests that those periods of custody will, on average, continue to get longer. This can be found on the following link: https://www.sentencingcouncil.org.uk/consultations/manslaughter-consultation/ DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{D5EAE8E1-64CE-4047-A7AE-228CB37D2166}https://www.shoosmiths.co.uk/client-resources/legal-updates/changes-to-environmental-impact-assessment-regime-12813.aspxChanges to the environmental impact assessment regime From 16 May 2017, new rules apply to the environmental impact assessment (EIA) regime in England with the introduction of the Town and Country Planning (Environmental Impact Assessment) Regulations 2017 (2017 Regulations). The 2017 Regulations add new complexities to the EIA process and mean that developers will need to frontload their environmental work when applying for planning permission. There are transitional provisions dealing with environmental statements, requests for screening opinions or directions and requests for scoping opinions or directions submitted before 16 May 2017, and dealing with screening and scoping opinions or directions made or adopted before 16 May 2017, all of which continue to be governed by the Town and Country Planning (Environmental Impact Assessment) Regulations 2011 (2011 Regulations). The key changes include the following. Definition of EIA EIA is defined as a process consisting of the preparation of an environmental statement; any consultation, publication and notification required by law; and consideration of the environmental statement when considering whether planning permission should be granted. Other than being a useful reference point, this is likely to have little impact in practice. Exemptions The 2017 Regulations restrict the existing exemption for defence projects so that it only applies where a project (or part of a project) has defence as its sole purpose, but extend it to include projects which have the response to civil emergencies as their sole purpose. It is not clear what types of project would fall within the latter category. Environmental factors In the list of environmental factors to be considered as part of the EIA process, 'human beings' is replaced with 'population and human health' and 'flora and fauna' is replaced with 'biodiversity'. On the face of it, these revised factors are wider and may lead to increased complexity in the relevant chapters of the environmental statement. The 2017 Regulations also clarify that the EIA should cover the 'direct and indirect significant effects' of the proposed development on the listed environmental factors. This suggests that minor impacts need not be considered in great detail, if at all. Time limits on screening decisions Under the 2011 Regulations, developers could agree to extend the time period within which the local planning authority had to adopt a screening opinion indefinitely. Under the 2017 Regulations this extension cannot exceed 90 days from the date of submission of the screening application, even if the developer and the local planning authority agree. Screening options, information and criteria The 2017 Regulations now clarify that a developer may provide a description of any features and/or measures envisaged to avoid or prevent what otherwise might have been significant adverse effects on the environment. This gives developers the opportunity of seeking to demonstrate that their project will not be likely to have significant adverse effects on the environment through earlier consideration of mitigation/avoidance measures. While this may increase the amount of work required before submitting a request for a screening opinion, it may also increase the number of projects that are 'screened out' at the screening stage. Environmental statements to be based on scoping opinions Environmental statements are now to be 'based on' the most recent scoping opinion or direction issued. While this appears prescriptive, the requirement is qualified in that environmental statements need only be based on the most recent scoping opinion/direction so far as the proposed development remains materially the same as the proposed development which was subject to the opinion/direction. This allows for minor changes to projects after a scoping opinion/direction has been issued. However, it may mean that more work needs to be carried out prior to requesting a scoping opinion. Competent experts There is a new requirement to use 'competent experts' in preparing environmental statements, which must be accompanied by a statement from the developer outlining the relevant expertise or qualifications of those competent experts. The term 'competent expert' is not defined. Comment While the changes are not significant, they may take time to bed in. However, they present an opportunity for potential objectors to scrutinise developers' and planning authorities' compliance with the new requirements and to use any non-compliance as grounds for bringing legal challenges to decisions to grant planning permission. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Thu, 11 May 2017 00:00:00 +0100<![CDATA[Angus Evers Matthew Price ]]><![CDATA[ From 16 May 2017, new rules apply to the environmental impact assessment (EIA) regime in England with the introduction of the Town and Country Planning (Environmental Impact Assessment) Regulations 2017 (2017 Regulations). The 2017 Regulations add new complexities to the EIA process and mean that developers will need to frontload their environmental work when applying for planning permission. There are transitional provisions dealing with environmental statements, requests for screening opinions or directions and requests for scoping opinions or directions submitted before 16 May 2017, and dealing with screening and scoping opinions or directions made or adopted before 16 May 2017, all of which continue to be governed by the Town and Country Planning (Environmental Impact Assessment) Regulations 2011 (2011 Regulations). The key changes include the following. Definition of EIA EIA is defined as a process consisting of the preparation of an environmental statement; any consultation, publication and notification required by law; and consideration of the environmental statement when considering whether planning permission should be granted. Other than being a useful reference point, this is likely to have little impact in practice. Exemptions The 2017 Regulations restrict the existing exemption for defence projects so that it only applies where a project (or part of a project) has defence as its sole purpose, but extend it to include projects which have the response to civil emergencies as their sole purpose. It is not clear what types of project would fall within the latter category. Environmental factors In the list of environmental factors to be considered as part of the EIA process, 'human beings' is replaced with 'population and human health' and 'flora and fauna' is replaced with 'biodiversity'. On the face of it, these revised factors are wider and may lead to increased complexity in the relevant chapters of the environmental statement. The 2017 Regulations also clarify that the EIA should cover the 'direct and indirect significant effects' of the proposed development on the listed environmental factors. This suggests that minor impacts need not be considered in great detail, if at all. Time limits on screening decisions Under the 2011 Regulations, developers could agree to extend the time period within which the local planning authority had to adopt a screening opinion indefinitely. Under the 2017 Regulations this extension cannot exceed 90 days from the date of submission of the screening application, even if the developer and the local planning authority agree. Screening options, information and criteria The 2017 Regulations now clarify that a developer may provide a description of any features and/or measures envisaged to avoid or prevent what otherwise might have been significant adverse effects on the environment. This gives developers the opportunity of seeking to demonstrate that their project will not be likely to have significant adverse effects on the environment through earlier consideration of mitigation/avoidance measures. While this may increase the amount of work required before submitting a request for a screening opinion, it may also increase the number of projects that are 'screened out' at the screening stage. Environmental statements to be based on scoping opinions Environmental statements are now to be 'based on' the most recent scoping opinion or direction issued. While this appears prescriptive, the requirement is qualified in that environmental statements need only be based on the most recent scoping opinion/direction so far as the proposed development remains materially the same as the proposed development which was subject to the opinion/direction. This allows for minor changes to projects after a scoping opinion/direction has been issued. However, it may mean that more work needs to be carried out prior to requesting a scoping opinion. Competent experts There is a new requirement to use 'competent experts' in preparing environmental statements, which must be accompanied by a statement from the developer outlining the relevant expertise or qualifications of those competent experts. The term 'competent expert' is not defined. Comment While the changes are not significant, they may take time to bed in. However, they present an opportunity for potential objectors to scrutinise developers' and planning authorities' compliance with the new requirements and to use any non-compliance as grounds for bringing legal challenges to decisions to grant planning permission. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{7D3A86C3-7270-49BF-949A-353E52F36D62}https://www.shoosmiths.co.uk/client-resources/legal-updates/fracking-up-the-pressure-chapter-2-12736.aspxFracking up the pressure - Chapter 2 In our October 2016 legal update 'Fracking up the pressure', we reported on the Secretary of State's (SoS) decisions in relation to four planning appeals made by the natural resources exploration and production company, Cuadrilla. On 12 April 2017 the Planning Court rejected legal challenges to one of those decisions. Background The procedural background to the case is complex. Cuadrilla originally made four planning applications to Lancashire County Council (LCC) in relation to drilling for shale gas in the Bowland Shale at two sites in Lancashire: Exploratory works at Preston New Road; Monitoring works at Preston New Road; Exploratory works at Roseacre Wood; and Monitoring works at Roseacre Wood. LCC refused the first three applications and granted the fourth subject to conditions. Cuadrilla appealed against the three refusals and against the conditions imposed on the permission for the monitoring works at Roseacre Wood. The SoS granted three of the four appeals and re-opened the public inquiry into the Roseacre Wood exploratory works appeal. Two objectors - the Preston New Road Action Group (PNRAG) and the interestingly-named Gayzer Frackman - brought a statutory challenge under section 288 of the Town and Country Planning Act 1990 (a similar procedure to judicial review) against the SoS's decision to grant planning permission for the exploratory works at Preston New Road. Each of the claimants raised different grounds of claim, which the court dealt with separately in an 82 page judgment. PNRAG's grounds of claim Four of PNARG's five grounds of claim were based on similar legal principles - the incorrect interpretation of local and national planning policies, and flaws in the planning inspector's reasoning. The court ruled that although these grounds were arguable, there was no legal error by the planning inspector or the SoS. It stressed that flexibility is required in the interpretation of planning policy, which must not be interpreted if it were some form of statute, contract or other legally binding instrument. PNRAG also argued that the SoS's decision was procedurally unfair because Cuadrilla had changed its position in relation to one of LCC's local planning policies without the statement of common ground being amended or the change being communicated to PNRAG or to the general public. The court ruled that although PNRAG had an arguable case on this ground, their claims were unsubstantiated, as Cuadrilla had set out its position in relation to the policy in its evidence and was cross-examined on it by PNRAG's counsel at the inquiry. However, the court was also critical of Cuadrilla's and the SoS's assertions that PNRAG ought to have made further submissions to the Planning Inspectorate or the SoS after the end of the inquiry. Gayzer Frackman's grounds of claim Mr Frackman first argued that the environmental statement accompanying Cuadrilla's planning applications for the Preston New Road site was inadequate, as it failed to consider the environmental impact of any extended flow testing and gas production that might take place after the exploratory works. He invited the court to make a reference to the Court of Justice of the European Union (CJEU) on the issue. Although the court accepted that this ground was arguable, it rejected his arguments and declined to make the reference to the CJEU, on the basis that any further development would be the subject of a new planning application and environmental statement. There was also no evidence that any gas production would result in increased gas consumption or greenhouse gas emissions in the UK - it would simply displace gas that would otherwise be produced elsewhere. Mr Frackman's second argument was that, applying the precautionary principle, the SoS could not have rationally concluded that it was appropriate to grant planning permission and that public health and other impacts would be reduced to an acceptable level and effectively controlled by other regulatory regimes. The court considered this unarguable. Comment The case is a useful reminder of the difficulties of challenging the interpretation of planning policies in the light of the existing case law on similar issues and the Planning Court's rejection of the legal challenge to North Yorkshire County Council's decision to grant planning permission to Third Energy to carry out hydraulic fracturing (covered in our February 2017 legal update 'Hydraulic fracturing - the third way'). Seeking a reference to the CJEU was undoubtedly an ambitious move, as the English courts have traditionally been reluctant to refer cases to the CJEU and may be even more reluctant to do so now that Article 50 has been triggered. To complicate matters further, the SoS's decision to re-open the inquiry for the Roseacre Wood exploratory works appeal is still the subject of a separate judicial review application. Read our previous article, 'Fracking up the pressure' here. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Tue, 25 Apr 2017 00:00:00 +0100<![CDATA[Angus Evers ]]><![CDATA[ In our October 2016 legal update 'Fracking up the pressure', we reported on the Secretary of State's (SoS) decisions in relation to four planning appeals made by the natural resources exploration and production company, Cuadrilla. On 12 April 2017 the Planning Court rejected legal challenges to one of those decisions. Background The procedural background to the case is complex. Cuadrilla originally made four planning applications to Lancashire County Council (LCC) in relation to drilling for shale gas in the Bowland Shale at two sites in Lancashire: Exploratory works at Preston New Road; Monitoring works at Preston New Road; Exploratory works at Roseacre Wood; and Monitoring works at Roseacre Wood. LCC refused the first three applications and granted the fourth subject to conditions. Cuadrilla appealed against the three refusals and against the conditions imposed on the permission for the monitoring works at Roseacre Wood. The SoS granted three of the four appeals and re-opened the public inquiry into the Roseacre Wood exploratory works appeal. Two objectors - the Preston New Road Action Group (PNRAG) and the interestingly-named Gayzer Frackman - brought a statutory challenge under section 288 of the Town and Country Planning Act 1990 (a similar procedure to judicial review) against the SoS's decision to grant planning permission for the exploratory works at Preston New Road. Each of the claimants raised different grounds of claim, which the court dealt with separately in an 82 page judgment. PNRAG's grounds of claim Four of PNARG's five grounds of claim were based on similar legal principles - the incorrect interpretation of local and national planning policies, and flaws in the planning inspector's reasoning. The court ruled that although these grounds were arguable, there was no legal error by the planning inspector or the SoS. It stressed that flexibility is required in the interpretation of planning policy, which must not be interpreted if it were some form of statute, contract or other legally binding instrument. PNRAG also argued that the SoS's decision was procedurally unfair because Cuadrilla had changed its position in relation to one of LCC's local planning policies without the statement of common ground being amended or the change being communicated to PNRAG or to the general public. The court ruled that although PNRAG had an arguable case on this ground, their claims were unsubstantiated, as Cuadrilla had set out its position in relation to the policy in its evidence and was cross-examined on it by PNRAG's counsel at the inquiry. However, the court was also critical of Cuadrilla's and the SoS's assertions that PNRAG ought to have made further submissions to the Planning Inspectorate or the SoS after the end of the inquiry. Gayzer Frackman's grounds of claim Mr Frackman first argued that the environmental statement accompanying Cuadrilla's planning applications for the Preston New Road site was inadequate, as it failed to consider the environmental impact of any extended flow testing and gas production that might take place after the exploratory works. He invited the court to make a reference to the Court of Justice of the European Union (CJEU) on the issue. Although the court accepted that this ground was arguable, it rejected his arguments and declined to make the reference to the CJEU, on the basis that any further development would be the subject of a new planning application and environmental statement. There was also no evidence that any gas production would result in increased gas consumption or greenhouse gas emissions in the UK - it would simply displace gas that would otherwise be produced elsewhere. Mr Frackman's second argument was that, applying the precautionary principle, the SoS could not have rationally concluded that it was appropriate to grant planning permission and that public health and other impacts would be reduced to an acceptable level and effectively controlled by other regulatory regimes. The court considered this unarguable. Comment The case is a useful reminder of the difficulties of challenging the interpretation of planning policies in the light of the existing case law on similar issues and the Planning Court's rejection of the legal challenge to North Yorkshire County Council's decision to grant planning permission to Third Energy to carry out hydraulic fracturing (covered in our February 2017 legal update 'Hydraulic fracturing - the third way'). Seeking a reference to the CJEU was undoubtedly an ambitious move, as the English courts have traditionally been reluctant to refer cases to the CJEU and may be even more reluctant to do so now that Article 50 has been triggered. To complicate matters further, the SoS's decision to re-open the inquiry for the Roseacre Wood exploratory works appeal is still the subject of a separate judicial review application. Read our previous article, 'Fracking up the pressure' here. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{287D32EB-CA41-45B1-898F-D6D7C1F71981}https://www.shoosmiths.co.uk/client-resources/legal-updates/guidelines-courts-confirm-harsher-regulatory-offences-12686.aspxSentencing Guidelines: courts&#39; comments confirm a harsher world for regulatory offences! Sentencing Guidelines, introduced on 1 February 2016 for Health and Safety, Food Hygiene and Corporate Manslaughter offences are starting to bite. A range of unsuccessful appeals against sentence has affirmed that the harsher sentences are being upheld and that the courts are right to follow the Guidelines fairly rigidly. The purpose of the Guidelines was to simplify sentencing by adopting a step-by-step approach which relies upon factors including; the culpability of the company, the seriousness of harm risked and the likelihood of harm. A stated aim of the Guidelines is for sentences to send a message to larger companies that such failings are unacceptable and to deter others from offending, with the courts handed both a starting point and spectrum for sentences based on the offender's turnover once the above assessment has been made. Large criminal fines Since their introduction, businesses convicted of health and safety breaches have been given larger criminal fines. While there have been high profile cases such as the £5 million fine handed down to the owners of Alton Towers for their 'Smiler' accident (a record for a non-fatal accident in the UK), more than a dozen other businesses have received fines in excess of £1 million in 2016. Total fines issued to businesses as a result of health and safety prosecutions since the introduction of the Guidelines are approaching £50 million - a recent fine under the Environmental Guidelines for Thames Water topped £20 million. Businesses must be on high alert. The approach of the appeal courts The appeal courts are taking a robust approach. Most appeals have been unsuccessful. Businesses must take note high fines and prison sentences are on the increase and in particular the change in approach of the courts which may affect strategic decisions very early in a case. Focus on risk In upholding fines, the appeal courts are taking a hard line. It is not necessary for anyone to be injured. In a recent case involving the release of natural gas on three separate occasions, the Court of Appeal upheld the £3m fine noting 'the offence lies in the creation of risk and it is that which must be punished'. The case highlights the focus on risk of harm when calculating health and safety sentences. As a result, more businesses fall within a higher offence category which in turn will attract a higher fine. Delay bringing prosecution Prosecution delay is not a good reason to reduce a sentence made under the Guidelines. That was the argument in a recent appeal by a tyre company where there was a 10 year delay in bringing the case to court. The argument was rejected and the £1m fine was upheld. Strict following of the Guidelines A company director was given a prison sentence of 12 months after pleading guilty to breaching health and safety laws after a worker was killed. Part of the appeal was that the prison sentence should have been suspended rather than served. Authorities from the Court of Appeal Criminal Division were submitted in support of the appeal together with a submission that those authorities should be persuasive in changing the sentence. The appeal court upheld the sentence. It emphasised that the Guidelines were to be strictly followed when sentencing and that judges would not consider the decisions of other cases in the Court of Appeal Criminal Division (or any other case law). North of the border: the jurisdictional influence In Scotland a recent appeal by Scottish Power following a serious accident in Scotland against a £1.75M fine was reduced to £1.2M on appeal, with the court acknowledging that the English guidelines could reasonably be used. The bigger picture It is important to look beyond the Guidelines and to remember that the HSE and other stakeholders, including the police, coroners and environmental health are looking beyond the traditional reactive prosecution following an accident occurring. We have identified the following trends: a sharp increase in the prosecution of directors and managers, not just to drive corporate pleas to offences; the HSE is increasingly willing to prosecute 'risk based' offences - accidents are merely tangible evidence of a failing, but the exposure to risk may be evident without any accident; the HSE has a stated aim to look beyond health and safety to issues such as welfare, including stress and workplace culture; as several businesses have found, most recently in the case of a Thames Valley aircraft manufacturer, the HSE will look far more carefully at the maintenance of and failure of equipment which they have manufactured, installed and serviced, rather than leaving this to product liability law; and the conviction of individuals is more likely to result in a custodial sentence. Practical solutions Assess your business risk profile in light of the new Guidelines. Focus on managing the risk of your core business, which could pose a much higher risk than others depending on your business activity, the quality of the workforce, the operating hours, use of and interaction with contractors and the equipment used (as well as how busy the business is and what pressures might be placed upon you to meet deadlines). Senior management (and shareholders who hold them to account) should not rely on delegating duties to consultants, contractors or middle managers. Do not allow your health and safety strategy to gather dust. There is no substitute for a culture which supports safe working, driven from the top echelons of management in every business, combined with properly implemented safety systems, up to date equipment and proportionate investment in the right internal and external experts. If an incident does occur, internal investigations and improvements going forward need to happen immediately. Prosecutors will give short shrift to the unprepared and fines are likely to be significant. Do not wait for a summons to land before considering your defence, a detailed accident investigation and instruction of experts - prosecutions can occur years down the line when reliable and persuasive evidence over topics like culpability and harm are harder to gather. Furthermore, with progress expected at the first hearing, defendants being given little notice of the details of a prosecution, and reductions for guilty pleas being eroded after that hearing, it is hugely important to be ready for any threatened prosecution when it arrives. . UK Business: you have been warned! Shoosmiths national regulatory team has recently been ranked in the top tier of firms advising on health and safety cases in the UK by leading directory, Chambers &amp; Partners 2016/17. Phil Ryan is a partner in the Reading office and Charles Arrand is a partner in the Milton Keynes office. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Wed, 05 Apr 2017 00:00:00 +0100<![CDATA[Philip Ryan Charles Arrand ]]><![CDATA[ Sentencing Guidelines, introduced on 1 February 2016 for Health and Safety, Food Hygiene and Corporate Manslaughter offences are starting to bite. A range of unsuccessful appeals against sentence has affirmed that the harsher sentences are being upheld and that the courts are right to follow the Guidelines fairly rigidly. The purpose of the Guidelines was to simplify sentencing by adopting a step-by-step approach which relies upon factors including; the culpability of the company, the seriousness of harm risked and the likelihood of harm. A stated aim of the Guidelines is for sentences to send a message to larger companies that such failings are unacceptable and to deter others from offending, with the courts handed both a starting point and spectrum for sentences based on the offender's turnover once the above assessment has been made. Large criminal fines Since their introduction, businesses convicted of health and safety breaches have been given larger criminal fines. While there have been high profile cases such as the £5 million fine handed down to the owners of Alton Towers for their 'Smiler' accident (a record for a non-fatal accident in the UK), more than a dozen other businesses have received fines in excess of £1 million in 2016. Total fines issued to businesses as a result of health and safety prosecutions since the introduction of the Guidelines are approaching £50 million - a recent fine under the Environmental Guidelines for Thames Water topped £20 million. Businesses must be on high alert. The approach of the appeal courts The appeal courts are taking a robust approach. Most appeals have been unsuccessful. Businesses must take note high fines and prison sentences are on the increase and in particular the change in approach of the courts which may affect strategic decisions very early in a case. Focus on risk In upholding fines, the appeal courts are taking a hard line. It is not necessary for anyone to be injured. In a recent case involving the release of natural gas on three separate occasions, the Court of Appeal upheld the £3m fine noting 'the offence lies in the creation of risk and it is that which must be punished'. The case highlights the focus on risk of harm when calculating health and safety sentences. As a result, more businesses fall within a higher offence category which in turn will attract a higher fine. Delay bringing prosecution Prosecution delay is not a good reason to reduce a sentence made under the Guidelines. That was the argument in a recent appeal by a tyre company where there was a 10 year delay in bringing the case to court. The argument was rejected and the £1m fine was upheld. Strict following of the Guidelines A company director was given a prison sentence of 12 months after pleading guilty to breaching health and safety laws after a worker was killed. Part of the appeal was that the prison sentence should have been suspended rather than served. Authorities from the Court of Appeal Criminal Division were submitted in support of the appeal together with a submission that those authorities should be persuasive in changing the sentence. The appeal court upheld the sentence. It emphasised that the Guidelines were to be strictly followed when sentencing and that judges would not consider the decisions of other cases in the Court of Appeal Criminal Division (or any other case law). North of the border: the jurisdictional influence In Scotland a recent appeal by Scottish Power following a serious accident in Scotland against a £1.75M fine was reduced to £1.2M on appeal, with the court acknowledging that the English guidelines could reasonably be used. The bigger picture It is important to look beyond the Guidelines and to remember that the HSE and other stakeholders, including the police, coroners and environmental health are looking beyond the traditional reactive prosecution following an accident occurring. We have identified the following trends: a sharp increase in the prosecution of directors and managers, not just to drive corporate pleas to offences; the HSE is increasingly willing to prosecute 'risk based' offences - accidents are merely tangible evidence of a failing, but the exposure to risk may be evident without any accident; the HSE has a stated aim to look beyond health and safety to issues such as welfare, including stress and workplace culture; as several businesses have found, most recently in the case of a Thames Valley aircraft manufacturer, the HSE will look far more carefully at the maintenance of and failure of equipment which they have manufactured, installed and serviced, rather than leaving this to product liability law; and the conviction of individuals is more likely to result in a custodial sentence. Practical solutions Assess your business risk profile in light of the new Guidelines. Focus on managing the risk of your core business, which could pose a much higher risk than others depending on your business activity, the quality of the workforce, the operating hours, use of and interaction with contractors and the equipment used (as well as how busy the business is and what pressures might be placed upon you to meet deadlines). Senior management (and shareholders who hold them to account) should not rely on delegating duties to consultants, contractors or middle managers. Do not allow your health and safety strategy to gather dust. There is no substitute for a culture which supports safe working, driven from the top echelons of management in every business, combined with properly implemented safety systems, up to date equipment and proportionate investment in the right internal and external experts. If an incident does occur, internal investigations and improvements going forward need to happen immediately. Prosecutors will give short shrift to the unprepared and fines are likely to be significant. Do not wait for a summons to land before considering your defence, a detailed accident investigation and instruction of experts - prosecutions can occur years down the line when reliable and persuasive evidence over topics like culpability and harm are harder to gather. Furthermore, with progress expected at the first hearing, defendants being given little notice of the details of a prosecution, and reductions for guilty pleas being eroded after that hearing, it is hugely important to be ready for any threatened prosecution when it arrives. . UK Business: you have been warned! Shoosmiths national regulatory team has recently been ranked in the top tier of firms advising on health and safety cases in the UK by leading directory, Chambers &amp; Partners 2016/17. Phil Ryan is a partner in the Reading office and Charles Arrand is a partner in the Milton Keynes office. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{26F5AEA8-2F97-4549-9888-23133568790C}https://www.shoosmiths.co.uk/client-resources/legal-updates/get-in-quick-reductions-sentencing-for-early-guilty-plea-12689.aspxGet in quick - Reductions in sentencing for early guilty plea The criminal courts have long provided an incentive to defendants, in the form of a substantial reduction in sentence, to plead guilty at an early stage in proceedings. With penalties for regulatory offences now regularly into the seven (and even eight) figures, a 25 or 33% discount could constitute a major saving, but the window for defendants in proceedings to grab their all-important maximum discount may not be open long, given more robust case management by courts at the first hearing and short timescales given by prosecutors to prepare any basis of plea. Now the Sentencing Council has published a Definitive Guideline on Reduction in Sentence for a Guilty Plea, which sets out the approach a court will take in much greater detail, so the clock will increasingly tick (and the available reduction lower accordingly) from the very first hearing. Prosecutions that the Guideline will apply to The Guideline applies to all matters which come before the criminal courts where the first hearing in a criminal court is on or after 1 June 2017, including to all prosecutions by agencies such as the Health and Safety Executive, the Environment Agency and Local Authorities. Experience shows that courts will take a published Guideline into account before it formally comes into force, meaning individuals and organisations facing prosecutions which are already underway can expect the new principles to be considered in their cases. Reduction in sentence that will be applied - First stage of proceedings The Guideline provides for a maximum reduction of one-third. The full discount will be applied where a guilty plea is indicated at the 'first stage of proceedings', normally the first hearing at which a plea or indication of plea is sought and recorded by the court. The court will almost invariably ask for a plea or indication of plea on the very first occasion that a matter is before the court. If legal advice is to be sought, it should be sought as far in advance of the first hearing as possible, to ensure there is time for a full exploration of the issues (including the factual context which could determine those all-important categories of harm and culpability). It is often the case that an investigation which has taken years to conclude will require a defendant to consider the evidence against it in a period of only weeks. In our experience, the full evidence required to make serious decisions in complex cases is rarely available in advance of (or even by) the first hearing. Reduction in sentence that will be applied - After the first stage of proceedings The Guideline provides for a maximum discount of one-quarter where a guilty plea is indicated after the first stage of proceedings, reducing on a sliding scale thereafter. Where a guilty plea is indicated or entered on the first day of trial, the maximum discount is further reduced to one-tenth (and may reduce to zero where a plea is entered during trial - for example at the end of the prosecution's case) - this is clearly designed to motivate those who wish to plead guilty to do so at the very earliest stage. Reduction in sentence that will be applied - where there is a Newton hearing Where the prosecution puts forward one version of events and the defendant wishes to plead guilty but asserts a different version of events, the court may hear evidence to determine any factual disputes in what is called a 'Newton hearing'. Newton hearings may become increasingly common in regulatory cases going forward, where sentencing guidelines require the court to make clear determinations about levels of culpability and harm which directly and dramatically impact on the level of sentence to be imposed, especially if a plea has been entered, but a key factor in determining category (and therefore penalty) for sentence cannot be agreed on the facts. Under the Guideline there is a real risk of jeopardising discount for a guilty plea by seeking a Newton hearing. If, after a Newton hearing, the court finds in favour of the prosecution, the reduction to be applied is halved: clearly, a very detailed financial analysis needs to be taken between the benefit to be achieved by winning an argument (in terms of category reduction) against the negative impact to be achieved by having a 33% reduction halved, if a defendant loses. Practical considerations Procedure and timing is all on the side of the prosecutor. You need to be prepared. Reductions in sentence, particularly for higher fines, can be significant. The emphasis must be on considering the prosecution case at the earliest possible stage, and ensuring that an informed decision about plea can be made at or before the first hearing. There may be very little time to prepare factual challenges or mitigation if the facts are accepted - do not wait to seek advice until a summons lands: if you have had a serious regulatory breach which is investigated (even amicably) by a regulator, legal advice should be sought early in proceedings, so that you can be prepared for the worst (and be relieved if that does not come to pass). Newton hearings should be avoided where possible, by early identification of evidence undermining the prosecution's version of events or supporting the defence version - non-legal expert evidence may be required to make that point convincingly, especially with more committed prosecutors. Meaningful negotiations with the prosecution can then be entered in to, so that disputes can be resolved outside the courtroom. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Wed, 05 Apr 2017 00:00:00 +0100<![CDATA[Philip Ryan Joanne Sear ]]><![CDATA[ The criminal courts have long provided an incentive to defendants, in the form of a substantial reduction in sentence, to plead guilty at an early stage in proceedings. With penalties for regulatory offences now regularly into the seven (and even eight) figures, a 25 or 33% discount could constitute a major saving, but the window for defendants in proceedings to grab their all-important maximum discount may not be open long, given more robust case management by courts at the first hearing and short timescales given by prosecutors to prepare any basis of plea. Now the Sentencing Council has published a Definitive Guideline on Reduction in Sentence for a Guilty Plea, which sets out the approach a court will take in much greater detail, so the clock will increasingly tick (and the available reduction lower accordingly) from the very first hearing. Prosecutions that the Guideline will apply to The Guideline applies to all matters which come before the criminal courts where the first hearing in a criminal court is on or after 1 June 2017, including to all prosecutions by agencies such as the Health and Safety Executive, the Environment Agency and Local Authorities. Experience shows that courts will take a published Guideline into account before it formally comes into force, meaning individuals and organisations facing prosecutions which are already underway can expect the new principles to be considered in their cases. Reduction in sentence that will be applied - First stage of proceedings The Guideline provides for a maximum reduction of one-third. The full discount will be applied where a guilty plea is indicated at the 'first stage of proceedings', normally the first hearing at which a plea or indication of plea is sought and recorded by the court. The court will almost invariably ask for a plea or indication of plea on the very first occasion that a matter is before the court. If legal advice is to be sought, it should be sought as far in advance of the first hearing as possible, to ensure there is time for a full exploration of the issues (including the factual context which could determine those all-important categories of harm and culpability). It is often the case that an investigation which has taken years to conclude will require a defendant to consider the evidence against it in a period of only weeks. In our experience, the full evidence required to make serious decisions in complex cases is rarely available in advance of (or even by) the first hearing. Reduction in sentence that will be applied - After the first stage of proceedings The Guideline provides for a maximum discount of one-quarter where a guilty plea is indicated after the first stage of proceedings, reducing on a sliding scale thereafter. Where a guilty plea is indicated or entered on the first day of trial, the maximum discount is further reduced to one-tenth (and may reduce to zero where a plea is entered during trial - for example at the end of the prosecution's case) - this is clearly designed to motivate those who wish to plead guilty to do so at the very earliest stage. Reduction in sentence that will be applied - where there is a Newton hearing Where the prosecution puts forward one version of events and the defendant wishes to plead guilty but asserts a different version of events, the court may hear evidence to determine any factual disputes in what is called a 'Newton hearing'. Newton hearings may become increasingly common in regulatory cases going forward, where sentencing guidelines require the court to make clear determinations about levels of culpability and harm which directly and dramatically impact on the level of sentence to be imposed, especially if a plea has been entered, but a key factor in determining category (and therefore penalty) for sentence cannot be agreed on the facts. Under the Guideline there is a real risk of jeopardising discount for a guilty plea by seeking a Newton hearing. If, after a Newton hearing, the court finds in favour of the prosecution, the reduction to be applied is halved: clearly, a very detailed financial analysis needs to be taken between the benefit to be achieved by winning an argument (in terms of category reduction) against the negative impact to be achieved by having a 33% reduction halved, if a defendant loses. Practical considerations Procedure and timing is all on the side of the prosecutor. You need to be prepared. Reductions in sentence, particularly for higher fines, can be significant. The emphasis must be on considering the prosecution case at the earliest possible stage, and ensuring that an informed decision about plea can be made at or before the first hearing. There may be very little time to prepare factual challenges or mitigation if the facts are accepted - do not wait to seek advice until a summons lands: if you have had a serious regulatory breach which is investigated (even amicably) by a regulator, legal advice should be sought early in proceedings, so that you can be prepared for the worst (and be relieved if that does not come to pass). Newton hearings should be avoided where possible, by early identification of evidence undermining the prosecution's version of events or supporting the defence version - non-legal expert evidence may be required to make that point convincingly, especially with more committed prosecutors. Meaningful negotiations with the prosecution can then be entered in to, so that disputes can be resolved outside the courtroom. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{A6352F30-3308-4821-AA10-7AA0432B5337}https://www.shoosmiths.co.uk/client-resources/legal-updates/record-20-million-fine-for-water-pollution-offences-12683.aspxRecord &#163;20 million fine for water pollution offences Penalties for environmental offences have been increasing since the introduction of the Sentencing Council's 'Environmental Offences: Definitive Guideline' ('the Guideline'). The Guideline applies to all sentencing on or after 1 July 2014 in England and Wales for specified environmental offences, regardless of the date of the offence. Soaring fines Before the introduction of the Guideline, fines exceeding £1 million for environmental offences were extremely rare, but they are now more common. In January 2016, Thames Water Utilities Ltd (TWUL) was fined £1 million for causing pollution to a canal. In December 2016, Southern Water Services Ltd was fined £2 million for causing pollution to the Kent coastline. On 22 March 2017, these sentences, considered exceptional at the time, were dramatically overtaken by another fine for TWUL imposed by Aylesbury Crown Court - an eye-watering £19.75 million for causing pollution to the River Thames, with an additional £600,000 in costs payable to the Environment Agency. Thames Water Utilities Prosecution The prosecution followed a series of six separate sewage pollution incidents on the River Thames, occurring at different sites between 2012 and 2014. Discharges of sewage into the river and its tributaries resulted in major environmental damage, including visible sewage and the death of birds, fish and invertebrates. According to the Environment Agency's press release, 'Investigations.revealed a catalogue of failures by TWUL management'. TWUL has issued its own press release, in which Chief Executive Steve Robertson says: 'We deeply regret each of these incidents at six of our sites during the period 2012-14. Since then we've reviewed how we do things at all levels and made a number of key changes. These have included increasing the numbers of staff in key operational roles and investing heavily to improve reliability. As a result, our performance has significantly improved. We understand our huge responsibilities to the environment, have learned from these serious events, and continue to invest at the rate of around £20 million a week on continually improving our service to our customers and the environment.' Board level and shareholder commitment Fines of this magnitude are not only designed to make company directors and senior management sit up and take notice of their environmental responsibilities, but are also intended to send a clear message to shareholders about their own responsibilities. Most environmental offences are 'strict liability', meaning that fault is not required, but awareness and forward planning can result in a reduced risk of an incident occurring in the first place. Where there has been a breach which has resulted in prosecution, the Court of Appeal has made it clear that Board-level commitment to compliance with environmental regulations will be a significant mitigating factor. Proactivity key to compliance On that basis, companies are likely to benefit from taking a pro-active approach to environmental compliance: environmental compliance should appear regularly on the Board agenda; the Board should put in place systems for monitoring and reporting on environmental compliance. It should receive both specific (eg incident-led) and routine reports; the Board should act on specific and routine reports which flag environmental compliance weaknesses; and environmental compliance discussions should be minuted in case of future investigations. Large fines are not only limited to water companies. In April 2016 waste management company Powerday was fined £1 million for various waste management offences. It is also worth noting that even if they are lower in absolute terms, as a proportion of turnover fines for smaller companies may be larger (and therefore more damaging to the business) than the highest fines imposed on water companies. We have an expert team who can assist regarding environmental regulation and compliance. Please get in touch with the authors should you need assistance. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Tue, 04 Apr 2017 00:00:00 +0100<![CDATA[Angus Evers Joanne Sear ]]><![CDATA[ Penalties for environmental offences have been increasing since the introduction of the Sentencing Council's 'Environmental Offences: Definitive Guideline' ('the Guideline'). The Guideline applies to all sentencing on or after 1 July 2014 in England and Wales for specified environmental offences, regardless of the date of the offence. Soaring fines Before the introduction of the Guideline, fines exceeding £1 million for environmental offences were extremely rare, but they are now more common. In January 2016, Thames Water Utilities Ltd (TWUL) was fined £1 million for causing pollution to a canal. In December 2016, Southern Water Services Ltd was fined £2 million for causing pollution to the Kent coastline. On 22 March 2017, these sentences, considered exceptional at the time, were dramatically overtaken by another fine for TWUL imposed by Aylesbury Crown Court - an eye-watering £19.75 million for causing pollution to the River Thames, with an additional £600,000 in costs payable to the Environment Agency. Thames Water Utilities Prosecution The prosecution followed a series of six separate sewage pollution incidents on the River Thames, occurring at different sites between 2012 and 2014. Discharges of sewage into the river and its tributaries resulted in major environmental damage, including visible sewage and the death of birds, fish and invertebrates. According to the Environment Agency's press release, 'Investigations.revealed a catalogue of failures by TWUL management'. TWUL has issued its own press release, in which Chief Executive Steve Robertson says: 'We deeply regret each of these incidents at six of our sites during the period 2012-14. Since then we've reviewed how we do things at all levels and made a number of key changes. These have included increasing the numbers of staff in key operational roles and investing heavily to improve reliability. As a result, our performance has significantly improved. We understand our huge responsibilities to the environment, have learned from these serious events, and continue to invest at the rate of around £20 million a week on continually improving our service to our customers and the environment.' Board level and shareholder commitment Fines of this magnitude are not only designed to make company directors and senior management sit up and take notice of their environmental responsibilities, but are also intended to send a clear message to shareholders about their own responsibilities. Most environmental offences are 'strict liability', meaning that fault is not required, but awareness and forward planning can result in a reduced risk of an incident occurring in the first place. Where there has been a breach which has resulted in prosecution, the Court of Appeal has made it clear that Board-level commitment to compliance with environmental regulations will be a significant mitigating factor. Proactivity key to compliance On that basis, companies are likely to benefit from taking a pro-active approach to environmental compliance: environmental compliance should appear regularly on the Board agenda; the Board should put in place systems for monitoring and reporting on environmental compliance. It should receive both specific (eg incident-led) and routine reports; the Board should act on specific and routine reports which flag environmental compliance weaknesses; and environmental compliance discussions should be minuted in case of future investigations. Large fines are not only limited to water companies. In April 2016 waste management company Powerday was fined £1 million for various waste management offences. It is also worth noting that even if they are lower in absolute terms, as a proportion of turnover fines for smaller companies may be larger (and therefore more damaging to the business) than the highest fines imposed on water companies. We have an expert team who can assist regarding environmental regulation and compliance. Please get in touch with the authors should you need assistance. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{E16D53E0-83D4-449C-ACD6-07F9CECCB601}https://www.shoosmiths.co.uk/client-resources/legal-updates/energy-savings-legal-requirement-not-voluntary-12664.aspxThe Energy Savings Opportunity Scheme: a legal requirement, not voluntary The government's Energy Savings Opportunity Scheme (ESOS) makes it mandatory for 'large undertakings' in the UK to carry out an energy audit every four years and notify the Environment Agency that they have done so. The title might lead businesses to think that participation in ESOS is voluntary, but actually the Energy Savings Opportunity Scheme Regulations 2014 make compliance mandatory. Qualifying undertakings that don't comply risk hefty penalties - a maximum fine of £50,000 and up to £500 in addition for each working day of non-compliance. The enforcement authorities can also publicise penalties they have imposed, which can cause reputational damage. The ESOS Regulations apply to large undertakings, judged on status on 31 December 2014. An undertaking includes not just companies, but also other corporate structures such as limited partnerships. There are special rules that apply to trust structures. A 'large' undertaking is any UK undertaking that either: employs 250 or more people, or has an annual turnover in excess of #50 million (£38,937,777) and an annual balance sheet total in excess of 43 million (EURO) (£33,486,489). ESOS also applies to an overseas undertaking with a UK registered establishment which has 250 or more UK employees (paying income tax in the UK). An undertaking's energy consumption does not affect whether it qualifies for ESOS. An undertaking with low energy consumption that meets the financial and employee numbers criteria for being a large undertaking will still qualify. You should also consider whether your business is part of a larger 'group', which can include being owned by an investment vehicle such as a private equity fund, as well as being part of a traditional corporate group. If so, then the default position is that the 'highest UK parent' in the group is responsible for compliance, but it can elect to make individual undertakings in the group responsible for their own compliance. As ESOS originates from the EU Energy Efficiency Directive, businesses that operate in other EU Member States will need to consider how their UK operations may affect their qualification for equivalent schemes in those Member States, which may have interpreted the qualification criteria differently. An undertaking that qualifies for ESOS must: calculate its total energy consumption; identify its areas of significant energy consumption; appoint a lead assessor; notify the Environment Agency (or other applicable regulator, if outside England); and keep records. Although the deadline for compliance with the first phase was extended to 28 January 2016, many businesses still missed this and may still be unaware that they are caught by ESOS. The enforcement authorities are both targeting businesses that they think should have complied and auditing businesses that did notify their compliance by the deadline. However, the enforcement authorities may not always have a proper understanding of organisational structures, so you may need to explain your structure if you have concluded that your business is not caught by ESOS but are then challenged by an enforcement authority. When new compliance schemes like ESOS come into force, there is often a period of time when businesses don't comply with their requirements because of a lack of knowledge or understanding. If you have just become aware of ESOS and think it might apply to your business, you should act now. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Tue, 28 Mar 2017 00:00:00 +0100<![CDATA[Angus Evers Joanne Sear ]]><![CDATA[ The government's Energy Savings Opportunity Scheme (ESOS) makes it mandatory for 'large undertakings' in the UK to carry out an energy audit every four years and notify the Environment Agency that they have done so. The title might lead businesses to think that participation in ESOS is voluntary, but actually the Energy Savings Opportunity Scheme Regulations 2014 make compliance mandatory. Qualifying undertakings that don't comply risk hefty penalties - a maximum fine of £50,000 and up to £500 in addition for each working day of non-compliance. The enforcement authorities can also publicise penalties they have imposed, which can cause reputational damage. The ESOS Regulations apply to large undertakings, judged on status on 31 December 2014. An undertaking includes not just companies, but also other corporate structures such as limited partnerships. There are special rules that apply to trust structures. A 'large' undertaking is any UK undertaking that either: employs 250 or more people, or has an annual turnover in excess of #50 million (£38,937,777) and an annual balance sheet total in excess of 43 million (EURO) (£33,486,489). ESOS also applies to an overseas undertaking with a UK registered establishment which has 250 or more UK employees (paying income tax in the UK). An undertaking's energy consumption does not affect whether it qualifies for ESOS. An undertaking with low energy consumption that meets the financial and employee numbers criteria for being a large undertaking will still qualify. You should also consider whether your business is part of a larger 'group', which can include being owned by an investment vehicle such as a private equity fund, as well as being part of a traditional corporate group. If so, then the default position is that the 'highest UK parent' in the group is responsible for compliance, but it can elect to make individual undertakings in the group responsible for their own compliance. As ESOS originates from the EU Energy Efficiency Directive, businesses that operate in other EU Member States will need to consider how their UK operations may affect their qualification for equivalent schemes in those Member States, which may have interpreted the qualification criteria differently. An undertaking that qualifies for ESOS must: calculate its total energy consumption; identify its areas of significant energy consumption; appoint a lead assessor; notify the Environment Agency (or other applicable regulator, if outside England); and keep records. Although the deadline for compliance with the first phase was extended to 28 January 2016, many businesses still missed this and may still be unaware that they are caught by ESOS. The enforcement authorities are both targeting businesses that they think should have complied and auditing businesses that did notify their compliance by the deadline. However, the enforcement authorities may not always have a proper understanding of organisational structures, so you may need to explain your structure if you have concluded that your business is not caught by ESOS but are then challenged by an enforcement authority. When new compliance schemes like ESOS come into force, there is often a period of time when businesses don't comply with their requirements because of a lack of knowledge or understanding. If you have just become aware of ESOS and think it might apply to your business, you should act now. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{31FBE2D2-E3C2-438C-AAB6-C1D4CC8C1FED}https://www.shoosmiths.co.uk/client-resources/legal-updates/reporting-payment-practices-performance-regulations-12648.aspxReporting on payment practices and performance regulations - unlimited fines This article looks at the new reporting on payment practices and performance regulations and the unlimited fines in place for non-compliance. On 6 April 2017, new regulations come into force which require larger companies and Limited Liability Partnerships (LLPs) to publish information about payment practices twice a year. This is part of a government initiative to encourage timely payments and thereby improve cashflow for smaller suppliers. The Reporting on Payment Practices and Performance Regulations 2017 and the Limited Liability Partnerships (Reporting on Payment Practices and Performance) Regulations 2017 (together 'Regulations') create new criminal offences for companies and their directors (or designated members in the case of LLPs) who fail to comply. Who do the Regulations apply to? The Regulations apply to companies and LLPs that exceed any of the two or more qualifying thresholds: a turnover of £36 million; a balance sheet total of more than £18 million; an average number of employees of 250. Where the business is a parent, the total group figures must be considered in determining whether the Regulations apply, but this does not absolve a UK subsidiary from the need to comply with the Regulations in its own right, if it qualifies on a standalone basis. All UK companies formed and registered under the Companies Act 2006 or previous legislation and all LLPs registered under the Limited Liability Partnerships Act 2000 must consider their own position. What is required? Businesses which meet the threshold are required to report on payment practices and performance for contracts entered into on a business to business basis for goods, services or intangible assets, including intellectual property (with an exception for contracts for financial services). Information including narrative descriptions of standard payment terms, statistics concerning the late payment of invoices, and statements about the business's process for resolving payment must be included in the report, which will be published on a government website and accessible by the public. The report must be approved by a director (or designated member) before it is published. By comparison, it is worth noting that a recent review of Modern Slavery statements found that many early reporters did not in fact comply, simply because they were not signed by a director. Reporting obligations Generally, a business will have two reporting periods in the financial year; one for the first six months of the financial year and the second for the remaining period until the financial year end. Under the Regulations, businesses are required to report within 30 days of the end of the reporting period. A business with a financial year commencing on 6 April 2017 (the date that the Regulations come into force) will be obliged to report on the period to 5 October 2017 by 4 November 2017. Offences Breach of the reporting requirements is a criminal offence. The company and directors (or designated members in the case of LLPs) are liable if the requirements to prepare and publish a report are not met, save that a director will not be liable if he or she took all reasonable steps to ensure compliance. There is no requirement that the director must know or ought to have known that an offence was being committed; It is also an offence to publish, or cause to be published, false or misleading information; Prosecutions can be brought up to three years after an offence; and Offences are punishable in the Magistrates' Court by an unlimited fine. The Explanatory Memorandum to the Regulations states that 'The Department [the Department for Business, Energy and Industrial Strategy] will generally seek to encourage a business to comply with the reporting requirement before steps are taken to prosecute', which indicates that criminal proceedings are likely to be reserved for incidents of serious or persistent non-compliance. There is a growing trend towards using the criminal law to impose moral and ethical requirements on corporate bodies, with liability attaching to both companies and company directors. The Corporate Finance Bill which is currently before the House of Lords, for example, will create corporate offences where a person associated with a body corporate or partnership facilitates the commission by an employee or agent of a tax evasion offence. What next? Assess whether your business meets the threshold criteria to determine whether it is required to report under the new Regulations and keep decision making under review, especially in growing businesses, or those close to the qualifying thresholds; Put a procedure in place with Board level approval to ensure compliance: Decide who will prepare the report for your business; Review payment practices and contract performance to gather necessary information; Prepare the report in good time to ensure its accuracy; Ensure that a director or designated member approves the report before publication; and Minute publication of the compliant report at Board level. Our Regulatory lawyers are experienced in all aspects of corporate compliance. If you wish to understand the impact of the regulations on your business or require legal advice please contact Philip Ryan or Stephen Johnstone who will be happy to assist. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Fri, 24 Mar 2017 00:00:00 Z<![CDATA[Philip Ryan ]]><![CDATA[ This article looks at the new reporting on payment practices and performance regulations and the unlimited fines in place for non-compliance. On 6 April 2017, new regulations come into force which require larger companies and Limited Liability Partnerships (LLPs) to publish information about payment practices twice a year. This is part of a government initiative to encourage timely payments and thereby improve cashflow for smaller suppliers. The Reporting on Payment Practices and Performance Regulations 2017 and the Limited Liability Partnerships (Reporting on Payment Practices and Performance) Regulations 2017 (together 'Regulations') create new criminal offences for companies and their directors (or designated members in the case of LLPs) who fail to comply. Who do the Regulations apply to? The Regulations apply to companies and LLPs that exceed any of the two or more qualifying thresholds: a turnover of £36 million; a balance sheet total of more than £18 million; an average number of employees of 250. Where the business is a parent, the total group figures must be considered in determining whether the Regulations apply, but this does not absolve a UK subsidiary from the need to comply with the Regulations in its own right, if it qualifies on a standalone basis. All UK companies formed and registered under the Companies Act 2006 or previous legislation and all LLPs registered under the Limited Liability Partnerships Act 2000 must consider their own position. What is required? Businesses which meet the threshold are required to report on payment practices and performance for contracts entered into on a business to business basis for goods, services or intangible assets, including intellectual property (with an exception for contracts for financial services). Information including narrative descriptions of standard payment terms, statistics concerning the late payment of invoices, and statements about the business's process for resolving payment must be included in the report, which will be published on a government website and accessible by the public. The report must be approved by a director (or designated member) before it is published. By comparison, it is worth noting that a recent review of Modern Slavery statements found that many early reporters did not in fact comply, simply because they were not signed by a director. Reporting obligations Generally, a business will have two reporting periods in the financial year; one for the first six months of the financial year and the second for the remaining period until the financial year end. Under the Regulations, businesses are required to report within 30 days of the end of the reporting period. A business with a financial year commencing on 6 April 2017 (the date that the Regulations come into force) will be obliged to report on the period to 5 October 2017 by 4 November 2017. Offences Breach of the reporting requirements is a criminal offence. The company and directors (or designated members in the case of LLPs) are liable if the requirements to prepare and publish a report are not met, save that a director will not be liable if he or she took all reasonable steps to ensure compliance. There is no requirement that the director must know or ought to have known that an offence was being committed; It is also an offence to publish, or cause to be published, false or misleading information; Prosecutions can be brought up to three years after an offence; and Offences are punishable in the Magistrates' Court by an unlimited fine. The Explanatory Memorandum to the Regulations states that 'The Department [the Department for Business, Energy and Industrial Strategy] will generally seek to encourage a business to comply with the reporting requirement before steps are taken to prosecute', which indicates that criminal proceedings are likely to be reserved for incidents of serious or persistent non-compliance. There is a growing trend towards using the criminal law to impose moral and ethical requirements on corporate bodies, with liability attaching to both companies and company directors. The Corporate Finance Bill which is currently before the House of Lords, for example, will create corporate offences where a person associated with a body corporate or partnership facilitates the commission by an employee or agent of a tax evasion offence. What next? Assess whether your business meets the threshold criteria to determine whether it is required to report under the new Regulations and keep decision making under review, especially in growing businesses, or those close to the qualifying thresholds; Put a procedure in place with Board level approval to ensure compliance: Decide who will prepare the report for your business; Review payment practices and contract performance to gather necessary information; Prepare the report in good time to ensure its accuracy; Ensure that a director or designated member approves the report before publication; and Minute publication of the compliant report at Board level. Our Regulatory lawyers are experienced in all aspects of corporate compliance. If you wish to understand the impact of the regulations on your business or require legal advice please contact Philip Ryan or Stephen Johnstone who will be happy to assist. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{8F46A9D6-24C9-498F-AA55-EC4F89EF63CC}https://www.shoosmiths.co.uk/client-resources/legal-updates/pricing-practices-guidelines-sword-or-shield-12277.aspxPricing Practices Guidelines: regulator sword or business shield? This article looks at the non-statutory guidelines on pricing practices published by the Chartered Trading Standards Institute and discusses whether they act as a sword for the regulator or a shield for businesses. The guidelines apply to all consumer goods and services irrespective of the platform or medium used by businesses to sell to consumers. Regulators will inevitably use the guidelines as a sword to try and inflict damage on those who fail to comply with them, or at the very least use them as the yardstick by which to measure legal compliance when investigating. The good news for businesses though is that the guidelines can also be used as a shield in the event of an investigation or if a prosecution ensues. Helpfully, the guidelines separate out various types of pricing practice to make them easily identifiable and recognisable and provide easily understood examples which are likely to prove helpful for training purposes and if businesses wish to draft their own internal guidelines. Their aim is to provide common sense advice to businesses who deal with consumers. The overarching principle is pricing transparency. A promotion must not mislead, take advantage of or deceive consumers. The average consumer, who is described by the guidance as 'reasonably well informed, reasonably observant and circumspect' (following the existing law), must be able to rely on the information provided by businesses when they decide to purchase the product or service. Information on a website must be communicated in a transparent manner and kept up to date. Consumers who visit the website must have all the information they need available to them. Requiring consumers to take extra steps such as clicking on a link or scrolling down a page to see crucial information such as extra costs is unlikely to satisfy the requirements of the guidelines. Pricing practices covered The types of pricing practice covered by the guidelines include; Introductory or 'new' prices Businesses must take care when using the words 'introductory' or 'new' in a promotion. What is 'introductory' or 'new' in one sector will be different to another. Businesses must take a view on how long such a price can last before the price should be increased to its normal selling price. The guidance suggests that if a product is rarely purchased, the word 'new' could be used for a longer period as compared to a more regularly purchased product. Comparisons to a competitor's price A comparison made with a competitor's price should be made on an objective basis. Comparisons are encouraged where the products marketed are the same or intended for the same purpose and can assist consumers who are often looking for the best value. Businesses could help consumers by providing means to check the comparison e.g. by providing a link to the competitor's product although care must be taken to avoid confusion. Recommended retail price A RRP is a price set by a manufacturer or supplier of the product. If a business uses a RRP extra care must be taken not to mislead consumers. The guidance recommends that if a business makes a price comparison to a RRP, it must be made clear to consumers that the higher price is a RRP rather than a price previously charged by the business. Volume offers Offers such as 'buy one get one free', meal deals or free offers must offer genuinely better value. They must be easy to understand with all necessary information easily accessible. Care must be taken not to take advantage of consumers who decide not to calculate for themselves whether or not the price promotion is better value. Price reductions These must be genuine. Determining factors to include: how long the product was on sale at the higher price and how recently, how many, what type and the location of outlets where the product was on sale at the higher price compared to where the price promotion is marketed. Cheaper products Businesses should avoid general claims about their products being cheaper than competitors if that claim only applies to selected items. Businesses should explain why the comparison is a fair one and the basis of the comparison. Location based price comparisons If a business decides to make a price comparison based on specific locations, to avoid confusing consumers it must check whether there are any local price variations. Free Something marketed as 'free' must genuinely be 'free' and consumers should be able to rely on the claim. A business must be able to show that the item is separable from or in addition to the product being purchased, the free item is supplied if a consumer complies with the terms of the promotion or the price of a product is the same with or without the free item. The quality of the item must not suffer as a result and it must not already be included in the price of a package deal. Due diligence Due diligence in a pricing practice is important if it is challenged. It is important to keep records of the way the product was priced in order to show that it was done fairly. The guidelines suggest that the regulators will be concerned with a number of factors including: the terms and conditions connected to the pricing practice (if any) and how they were communicated to consumers evidence surrounding how the price promotion was communicated to consumers e.g. in newspapers, signs, advertisements, emails the stock available during the price promotion evidence of the competitor's pricing and product on a like for like basis if a comparison has been made with a competitor In the broader meaning of due diligence it will be important, in seeking to demonstrate that the business has done what might reasonably be expected to ensure compliance with the law, that the business can show that those responsible for pricing practices within the organisation are aware of and familiar with the guidelines, have been trained in relation to them, and understand what the guidelines are trying to achieve and the overarching principle of transparency in dealings with consumers. What next? The guidelines will be in force from April 2017. The examples contained within the guidelines are held up as best practice for businesses. Businesses should act as soon as possible after the busy Christmas and New Year's sales period to review their policies, procedures and training practices. Whilst adhering to the guidelines will never guarantee a complete defence to a prosecution (ultimately, a court will decide on a case by case basis whether or not a pricing practice is compliant or unfair), properly applied they are likely to give businesses the best prospect of ensuring that their pricing practices are legally compliant, of ensuring that customers feel that they are being dealt with transparently, of avoiding the scrutiny of the regulator and, if scrutinised, being able to satisfy the regulator that their concerns are misconceived. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Wed, 04 Jan 2017 00:00:00 Z<![CDATA[Charles Arrand Roy Tozer ]]><![CDATA[ This article looks at the non-statutory guidelines on pricing practices published by the Chartered Trading Standards Institute and discusses whether they act as a sword for the regulator or a shield for businesses. The guidelines apply to all consumer goods and services irrespective of the platform or medium used by businesses to sell to consumers. Regulators will inevitably use the guidelines as a sword to try and inflict damage on those who fail to comply with them, or at the very least use them as the yardstick by which to measure legal compliance when investigating. The good news for businesses though is that the guidelines can also be used as a shield in the event of an investigation or if a prosecution ensues. Helpfully, the guidelines separate out various types of pricing practice to make them easily identifiable and recognisable and provide easily understood examples which are likely to prove helpful for training purposes and if businesses wish to draft their own internal guidelines. Their aim is to provide common sense advice to businesses who deal with consumers. The overarching principle is pricing transparency. A promotion must not mislead, take advantage of or deceive consumers. The average consumer, who is described by the guidance as 'reasonably well informed, reasonably observant and circumspect' (following the existing law), must be able to rely on the information provided by businesses when they decide to purchase the product or service. Information on a website must be communicated in a transparent manner and kept up to date. Consumers who visit the website must have all the information they need available to them. Requiring consumers to take extra steps such as clicking on a link or scrolling down a page to see crucial information such as extra costs is unlikely to satisfy the requirements of the guidelines. Pricing practices covered The types of pricing practice covered by the guidelines include; Introductory or 'new' prices Businesses must take care when using the words 'introductory' or 'new' in a promotion. What is 'introductory' or 'new' in one sector will be different to another. Businesses must take a view on how long such a price can last before the price should be increased to its normal selling price. The guidance suggests that if a product is rarely purchased, the word 'new' could be used for a longer period as compared to a more regularly purchased product. Comparisons to a competitor's price A comparison made with a competitor's price should be made on an objective basis. Comparisons are encouraged where the products marketed are the same or intended for the same purpose and can assist consumers who are often looking for the best value. Businesses could help consumers by providing means to check the comparison e.g. by providing a link to the competitor's product although care must be taken to avoid confusion. Recommended retail price A RRP is a price set by a manufacturer or supplier of the product. If a business uses a RRP extra care must be taken not to mislead consumers. The guidance recommends that if a business makes a price comparison to a RRP, it must be made clear to consumers that the higher price is a RRP rather than a price previously charged by the business. Volume offers Offers such as 'buy one get one free', meal deals or free offers must offer genuinely better value. They must be easy to understand with all necessary information easily accessible. Care must be taken not to take advantage of consumers who decide not to calculate for themselves whether or not the price promotion is better value. Price reductions These must be genuine. Determining factors to include: how long the product was on sale at the higher price and how recently, how many, what type and the location of outlets where the product was on sale at the higher price compared to where the price promotion is marketed. Cheaper products Businesses should avoid general claims about their products being cheaper than competitors if that claim only applies to selected items. Businesses should explain why the comparison is a fair one and the basis of the comparison. Location based price comparisons If a business decides to make a price comparison based on specific locations, to avoid confusing consumers it must check whether there are any local price variations. Free Something marketed as 'free' must genuinely be 'free' and consumers should be able to rely on the claim. A business must be able to show that the item is separable from or in addition to the product being purchased, the free item is supplied if a consumer complies with the terms of the promotion or the price of a product is the same with or without the free item. The quality of the item must not suffer as a result and it must not already be included in the price of a package deal. Due diligence Due diligence in a pricing practice is important if it is challenged. It is important to keep records of the way the product was priced in order to show that it was done fairly. The guidelines suggest that the regulators will be concerned with a number of factors including: the terms and conditions connected to the pricing practice (if any) and how they were communicated to consumers evidence surrounding how the price promotion was communicated to consumers e.g. in newspapers, signs, advertisements, emails the stock available during the price promotion evidence of the competitor's pricing and product on a like for like basis if a comparison has been made with a competitor In the broader meaning of due diligence it will be important, in seeking to demonstrate that the business has done what might reasonably be expected to ensure compliance with the law, that the business can show that those responsible for pricing practices within the organisation are aware of and familiar with the guidelines, have been trained in relation to them, and understand what the guidelines are trying to achieve and the overarching principle of transparency in dealings with consumers. What next? The guidelines will be in force from April 2017. The examples contained within the guidelines are held up as best practice for businesses. Businesses should act as soon as possible after the busy Christmas and New Year's sales period to review their policies, procedures and training practices. Whilst adhering to the guidelines will never guarantee a complete defence to a prosecution (ultimately, a court will decide on a case by case basis whether or not a pricing practice is compliant or unfair), properly applied they are likely to give businesses the best prospect of ensuring that their pricing practices are legally compliant, of ensuring that customers feel that they are being dealt with transparently, of avoiding the scrutiny of the regulator and, if scrutinised, being able to satisfy the regulator that their concerns are misconceived. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{302D84BA-AADD-4EEA-8F11-881880C61BED}https://www.shoosmiths.co.uk/client-resources/legal-updates/modern-slavery-act-compliance-benchmarking-12274.aspxModern Slavery Act compliance - Are you ready for benchmarking? While it is estimated that some 12,000 UK companies are required to publish a statement under Section 54 of the Modern Slavery Act, to date less than 10% have done so. We can expect to see a flurry of statements within the next few months particularly from those companies whose financial and calendar year end are the same. A number of Non-Governmental Organisations have been critical of some of the early statements see here. It is perhaps not surprising that a number of published statements seem to have been used as a template by others, often compliance is being treated as a chore and passed around departments sometimes landing with procurement, human resources or legal. In house counsel charged to comply have often relied on the PLC template as few others existed. On 6 December 2016, during Human Rights Week, the Law Society launched its own practice note setting out guidance to all solicitors which also included a template for a draft statement. See here. Like all precedents these templates make good servants but bad masters. The government deliberately steered away from including a draft statement in their statutory guidance preferring companies to be open and transparent about their supply chains and their efforts to prevent modern slavery in their own words. Whilst there is no penalty for non-compliance (other than the government taking out an injunction to enforce publication) the real risk for companies is to their brand in the court of public opinion. The announcement of proposed benchmarking in a number of industries will all add to the pressure on companies to ensure leadership from the very top on this issue. See here. However, no one should be in any doubt that the government's current approach in allowing companies freedom to demonstrate compliance in their own way could change. Kevin Hyland, OBE, the UK Anti-Slavery Commissioner, whilst acknowledging that real change will take time, has also made it perfectly clear that future punitive measures for non-compliance have not been ruled out. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Wed, 21 Dec 2016 00:00:00 Z<![CDATA[Hayley Saunders ]]><![CDATA[ While it is estimated that some 12,000 UK companies are required to publish a statement under Section 54 of the Modern Slavery Act, to date less than 10% have done so. We can expect to see a flurry of statements within the next few months particularly from those companies whose financial and calendar year end are the same. A number of Non-Governmental Organisations have been critical of some of the early statements see here. It is perhaps not surprising that a number of published statements seem to have been used as a template by others, often compliance is being treated as a chore and passed around departments sometimes landing with procurement, human resources or legal. In house counsel charged to comply have often relied on the PLC template as few others existed. On 6 December 2016, during Human Rights Week, the Law Society launched its own practice note setting out guidance to all solicitors which also included a template for a draft statement. See here. Like all precedents these templates make good servants but bad masters. The government deliberately steered away from including a draft statement in their statutory guidance preferring companies to be open and transparent about their supply chains and their efforts to prevent modern slavery in their own words. Whilst there is no penalty for non-compliance (other than the government taking out an injunction to enforce publication) the real risk for companies is to their brand in the court of public opinion. The announcement of proposed benchmarking in a number of industries will all add to the pressure on companies to ensure leadership from the very top on this issue. See here. However, no one should be in any doubt that the government's current approach in allowing companies freedom to demonstrate compliance in their own way could change. Kevin Hyland, OBE, the UK Anti-Slavery Commissioner, whilst acknowledging that real change will take time, has also made it perfectly clear that future punitive measures for non-compliance have not been ruled out. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{6AD5AC87-7157-4CB9-91B3-6E35E984B775}https://www.shoosmiths.co.uk/client-resources/legal-updates/modern-slavery-compliance-tick-box-exercise-12129.aspxModern Slavery Act compliance - A cut and paste job? As organisations seek to comply with Section 54 of the Modern Slavery Act, by publishing statements setting out their efforts to combat modern slavery in supply chains, is it in danger of becoming a 'tick box exercise'? In addition some NGO's are already commenting that many published statements are showing evidence of identical wording. Organisations such as the Business and Human Rights Resource Centre have published links to most of the statements made to date. Recent research, by Ergon Associates, however has revealed almost identical wording in a considerable number of them. In its guidance on such statements, the government deliberately steered away from prescribing content in the hope individual companies would set out details of the effort they are making and steps they are taking. Instead there is some concern that it has become a tick box exercise. Many organisations have struggled even to identify their first tier supply chain and a number of those who have succeeded have merely sent a letter to them seeking confirmation that the Modern Slavery Legislation is being complied with and 'tick the box', chasing up replies with a threat of terminating business relationships. More enlightened organisations have embraced the spirit of the legislation and having mapped at least their first tier supply chain have carried out a risk assessment and based on the findings, carried out appropriate due diligence in high risk areas or sectors. This approach is certainly what government expected. Speaking at the Modern Slavery and Ethical Labour in Construction Leadership Symposium held at the House of Commons last week, the UK Independent Anti-Slavery Commissioner, Kevin Hyland OBE expressed the view that whilst there was currently no punitive sanctions for non-compliance with section 54 at present, it could not be ruled out in future. There is little doubt that many NGO's are closely monitoring the public statements made, with some already identifying those statements not considered compliant. This together with other recent developments and new regulation means that organisations would be well advised to keep their approach to compliance under review. A continuous improvement approach to reporting in this area was always envisaged by government and NGO's alike especially as examination of second tier suppliers and beyond are undertaken. Organisations would be well advised to consider their future strategy in this area in the light of these developments. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Tue, 15 Nov 2016 00:00:00 Z<![CDATA[Hayley Saunders ]]><![CDATA[ As organisations seek to comply with Section 54 of the Modern Slavery Act, by publishing statements setting out their efforts to combat modern slavery in supply chains, is it in danger of becoming a 'tick box exercise'? In addition some NGO's are already commenting that many published statements are showing evidence of identical wording. Organisations such as the Business and Human Rights Resource Centre have published links to most of the statements made to date. Recent research, by Ergon Associates, however has revealed almost identical wording in a considerable number of them. In its guidance on such statements, the government deliberately steered away from prescribing content in the hope individual companies would set out details of the effort they are making and steps they are taking. Instead there is some concern that it has become a tick box exercise. Many organisations have struggled even to identify their first tier supply chain and a number of those who have succeeded have merely sent a letter to them seeking confirmation that the Modern Slavery Legislation is being complied with and 'tick the box', chasing up replies with a threat of terminating business relationships. More enlightened organisations have embraced the spirit of the legislation and having mapped at least their first tier supply chain have carried out a risk assessment and based on the findings, carried out appropriate due diligence in high risk areas or sectors. This approach is certainly what government expected. Speaking at the Modern Slavery and Ethical Labour in Construction Leadership Symposium held at the House of Commons last week, the UK Independent Anti-Slavery Commissioner, Kevin Hyland OBE expressed the view that whilst there was currently no punitive sanctions for non-compliance with section 54 at present, it could not be ruled out in future. There is little doubt that many NGO's are closely monitoring the public statements made, with some already identifying those statements not considered compliant. This together with other recent developments and new regulation means that organisations would be well advised to keep their approach to compliance under review. A continuous improvement approach to reporting in this area was always envisaged by government and NGO's alike especially as examination of second tier suppliers and beyond are undertaken. Organisations would be well advised to consider their future strategy in this area in the light of these developments. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{93425D67-4358-416A-9B9F-E56EA8DD0046}https://www.shoosmiths.co.uk/client-resources/legal-updates/modern-slavery-just-compliance-or-wider-human-rights-12128.aspxModern Slavery Act - Just compliance or should you consider wider Human Rights? While organisations are working towards publishing their first statement regarding transparency in their supply chain or still embedding systems to ensure their next statement shows a continuous improvement approach, things are moving on. The government has published its response to their consultation on the EU Non-Financial Reporting Directive (2014/95/EU) and issued draft regulations. The Companies, Partnerships and Groups (Accounts and Non-Financial Reporting) Regulations 2016 will require relevant companies to prepare a non-financial information statement as part of their strategic report covering a number of human rights issues. The new regulations have been laid before parliament and are likely to come into force very shortly as they apply to financial reporting for relevant companies and partnerships from 1 January 2017. The Regulations apply to: traded companies (i.e. those with securities admitted to trading on regulated markets) banking companies authorised insurance companies; and those companies carrying out insurance market activities Companies which benefit from a 'small' or 'medium sized' company exemption need not comply. Companies or groups with, on average, less than 500 employees during the relevant reporting period are also exempt. The Regulations amends the Companies Act 2006 and whilst they sit alongside the provisions requiring the production of a strategic report, they have been kept separate from them. If caught, an organisation will need to report to 'the extent necessary for an understanding of the company's development, performance and position' the impact of its activity relating to, as a minimum - environmental matters (including the impact of the company's business on the environment) the company's employees social matters respect for human rights, and anti-corruption and anti-bribery matters The organisations policies in these areas will need to described as well as setting out how risks in these areas are managed. Meanwhile the European Parliament has recently adopted a report requesting legislation to prevent and punish human rights abuses by businesses in third countries. MEPs have urged the European Commission to propose binding and enforceable rules, sanctions and monitoring mechanisms for corporate human rights abuses. In the report, MEPs also call on Member States and third countries to urgently adopt binding instruments devoted to the protection of human rights in business, specifically providing for thorough investigations into such abuses and stating that victims should have access to an effective remedy against corporations, which pierce the corporate veil where corporations have complex structures. The report additionally calls on companies directly to carry out human rights due diligence and create internal policies on such issues. As well as being considered best practice in the area of corporate social responsibility, these developments are likely to be a sign of things to come for many organisations. Businesses should ask themselves now, do we carry on with mere Modern Slavery Act compliance or to the extent we do not already cover these areas, bite the bullet now and move towards wider human rights policies and procedures. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Tue, 15 Nov 2016 00:00:00 Z<![CDATA[Hayley Saunders ]]><![CDATA[ While organisations are working towards publishing their first statement regarding transparency in their supply chain or still embedding systems to ensure their next statement shows a continuous improvement approach, things are moving on. The government has published its response to their consultation on the EU Non-Financial Reporting Directive (2014/95/EU) and issued draft regulations. The Companies, Partnerships and Groups (Accounts and Non-Financial Reporting) Regulations 2016 will require relevant companies to prepare a non-financial information statement as part of their strategic report covering a number of human rights issues. The new regulations have been laid before parliament and are likely to come into force very shortly as they apply to financial reporting for relevant companies and partnerships from 1 January 2017. The Regulations apply to: traded companies (i.e. those with securities admitted to trading on regulated markets) banking companies authorised insurance companies; and those companies carrying out insurance market activities Companies which benefit from a 'small' or 'medium sized' company exemption need not comply. Companies or groups with, on average, less than 500 employees during the relevant reporting period are also exempt. The Regulations amends the Companies Act 2006 and whilst they sit alongside the provisions requiring the production of a strategic report, they have been kept separate from them. If caught, an organisation will need to report to 'the extent necessary for an understanding of the company's development, performance and position' the impact of its activity relating to, as a minimum - environmental matters (including the impact of the company's business on the environment) the company's employees social matters respect for human rights, and anti-corruption and anti-bribery matters The organisations policies in these areas will need to described as well as setting out how risks in these areas are managed. Meanwhile the European Parliament has recently adopted a report requesting legislation to prevent and punish human rights abuses by businesses in third countries. MEPs have urged the European Commission to propose binding and enforceable rules, sanctions and monitoring mechanisms for corporate human rights abuses. In the report, MEPs also call on Member States and third countries to urgently adopt binding instruments devoted to the protection of human rights in business, specifically providing for thorough investigations into such abuses and stating that victims should have access to an effective remedy against corporations, which pierce the corporate veil where corporations have complex structures. The report additionally calls on companies directly to carry out human rights due diligence and create internal policies on such issues. As well as being considered best practice in the area of corporate social responsibility, these developments are likely to be a sign of things to come for many organisations. Businesses should ask themselves now, do we carry on with mere Modern Slavery Act compliance or to the extent we do not already cover these areas, bite the bullet now and move towards wider human rights policies and procedures. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{1E7E15F2-AA81-4ABF-A368-C8E0BD215FBC}https://www.shoosmiths.co.uk/client-resources/legal-updates/health-and-safety-fines-scotland-12123.aspxHealth and safety fines - Scotland How should Scottish Courts apply the Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences: Definitive Guideline? The Scottish Appeal Court has approved the principle that it is appropriate for the Scottish Courts to have regard to the Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences: Definitive Guideline (the 2015 Guidelines) that are applicable in England and Wales to all sentences imposed after 1 February 2016. The Court was considering an appeal by Scottish Power against a fine of £1,750,000 which had been imposed following the company pleading guilty to a breach of Section 2(1) and Section 33(1) of the Health and Safety at Work Act 1974. The charge related to one of their employees who had been seriously injured and disfigured when he became engulfed in high pressure high temperature steam. Although the Court upheld the appeal and substituted a lower fine of £1,200,000 the Court gave the following guidance:- Scottish Court are encouraged to continue to have regard to guidelines from England in appropriate cases, notably, but not exclusively, where the charges involve United Kingdom statutory offences. However English guidelines need not be interpreted and applied in a mechanistic way and it may be equally important to have regard to existing precedent in Scotland. Such precedent will include Opinions from the Scottish High Court or other approved sources. The Court observed that in Scotland there has been difficulty in determining the appropriate fines to be levied and that historically the Courts have had regard to the levels of fines imposed for equivalent offences in England. In reducing the fine, the Appeal Court took the view that while the Sheriff of first instance did have regard to the 2015 Guidelines, it was not entirely clear how he had applied them. In reviewing the sentencing exercise the Appeal Court came to a lower 'starting point' namely £1,500,000 to which they applied a 20% reduction due to Scottish Power having tendered a plea of guilty. Notwithstanding the result of the appeal, the fine still remains one of the highest ever imposed in Scotland for a non-fatal injury. For specific advice on Scottish Health and Safety or other regulatory matters, please contact Graham Reid who is a Commercial Litigation and Dispute Resolution Partner in our Edinburgh Office. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Mon, 14 Nov 2016 00:00:00 Z<![CDATA[Alex Bishop ]]><![CDATA[ How should Scottish Courts apply the Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences: Definitive Guideline? The Scottish Appeal Court has approved the principle that it is appropriate for the Scottish Courts to have regard to the Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences: Definitive Guideline (the 2015 Guidelines) that are applicable in England and Wales to all sentences imposed after 1 February 2016. The Court was considering an appeal by Scottish Power against a fine of £1,750,000 which had been imposed following the company pleading guilty to a breach of Section 2(1) and Section 33(1) of the Health and Safety at Work Act 1974. The charge related to one of their employees who had been seriously injured and disfigured when he became engulfed in high pressure high temperature steam. Although the Court upheld the appeal and substituted a lower fine of £1,200,000 the Court gave the following guidance:- Scottish Court are encouraged to continue to have regard to guidelines from England in appropriate cases, notably, but not exclusively, where the charges involve United Kingdom statutory offences. However English guidelines need not be interpreted and applied in a mechanistic way and it may be equally important to have regard to existing precedent in Scotland. Such precedent will include Opinions from the Scottish High Court or other approved sources. The Court observed that in Scotland there has been difficulty in determining the appropriate fines to be levied and that historically the Courts have had regard to the levels of fines imposed for equivalent offences in England. In reducing the fine, the Appeal Court took the view that while the Sheriff of first instance did have regard to the 2015 Guidelines, it was not entirely clear how he had applied them. In reviewing the sentencing exercise the Appeal Court came to a lower 'starting point' namely £1,500,000 to which they applied a 20% reduction due to Scottish Power having tendered a plea of guilty. Notwithstanding the result of the appeal, the fine still remains one of the highest ever imposed in Scotland for a non-fatal injury. For specific advice on Scottish Health and Safety or other regulatory matters, please contact Graham Reid who is a Commercial Litigation and Dispute Resolution Partner in our Edinburgh Office. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{E5AFA74E-AF07-4782-BA5F-DDC2050420EC}https://www.shoosmiths.co.uk/client-resources/legal-updates/warrants-recover-documents-held-by-scottish-solicitors-12074.aspxPolice warrants to recover documents held by Scottish solicitors A High Court Judge in Scotland has recently criticised the basis upon which the Crown Prosecution Service obtained and sought to enforce a warrant to recover papers and documents held by a law firm's office in Edinburgh. The firm had previously acted in defending previous civil claims for a corporate client who was also under criminal investigation. In doing so the firm had come into possession of various documents to which they asserted legal privilege and confidentiality. Communication had taken place between the police and the firm as to what extent any of the documentation held by them could or should be released. Notwithstanding that, without advising the firm, the Crown applied for and were granted a warrant that entitled them to recover a wide range of papers or other evidence material to the investigation and which was potentially held by the firm. When the law firm were visited by police officers who were proposing to execute the warrant, they persuaded the police officers to delay proceeding with that and they were able to make an emergency application to the court. In setting out his reasons for suspending the warrant the High Court Judge relied upon earlier guidelines that had been laid down in an unpublished decision earlier this year. The following comments taken from both decisions are therefore useful as future guidelines:- A police officer seeking a warrant to search premises and to recover evidence must not provide information which he knows to be inaccurate or misleading and he should provide all relevant information. This would include the duty to disclose the fact that the entity against whom the warrant is intended to be enforced are a firm of solicitors who are maintaining a plea of legal privilege. Where there is no suggestion that the solicitors are involved in any form of illegality nor that they would be likely to destroy or conceal any relevant material, an application for a warrant to search their premises to recover such material without providing them with prior intimation of the application would be oppressive. The courts must be careful to protect the important right of legal privilege which generally attaches to communications between a client and their solicitor and therefore it is essential that due caution is observed when a Court is granting an order for the recovery of solicitors files. Where a warrant for searching a solicitor's office is authorised in a situation that legal privilege is being asserted then there ought to be a provision of independent supervision of the police search by a commissioner appointed by the Court or alternatively a condition attached that requires any material seized to be sealed unread and delivered to the Court to enable it to adjudicate upon the issue of confidentiality. This is a useful reminder that many commercial disputes could have a potential criminal aspect but clients' interests will be given proper protection against inappropriate actions of the prosecuting authority under the historical principles of client confidentiality and legal privilege. For specific advice on recovery of evidence, legal privilege or other regulatory matters, please contact Graham Reid who is a commercial litigation and dispute resolution partner in our Edinburgh office. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Mon, 24 Oct 2016 00:00:00 +0100<![CDATA[Alex Bishop ]]><![CDATA[ A High Court Judge in Scotland has recently criticised the basis upon which the Crown Prosecution Service obtained and sought to enforce a warrant to recover papers and documents held by a law firm's office in Edinburgh. The firm had previously acted in defending previous civil claims for a corporate client who was also under criminal investigation. In doing so the firm had come into possession of various documents to which they asserted legal privilege and confidentiality. Communication had taken place between the police and the firm as to what extent any of the documentation held by them could or should be released. Notwithstanding that, without advising the firm, the Crown applied for and were granted a warrant that entitled them to recover a wide range of papers or other evidence material to the investigation and which was potentially held by the firm. When the law firm were visited by police officers who were proposing to execute the warrant, they persuaded the police officers to delay proceeding with that and they were able to make an emergency application to the court. In setting out his reasons for suspending the warrant the High Court Judge relied upon earlier guidelines that had been laid down in an unpublished decision earlier this year. The following comments taken from both decisions are therefore useful as future guidelines:- A police officer seeking a warrant to search premises and to recover evidence must not provide information which he knows to be inaccurate or misleading and he should provide all relevant information. This would include the duty to disclose the fact that the entity against whom the warrant is intended to be enforced are a firm of solicitors who are maintaining a plea of legal privilege. Where there is no suggestion that the solicitors are involved in any form of illegality nor that they would be likely to destroy or conceal any relevant material, an application for a warrant to search their premises to recover such material without providing them with prior intimation of the application would be oppressive. The courts must be careful to protect the important right of legal privilege which generally attaches to communications between a client and their solicitor and therefore it is essential that due caution is observed when a Court is granting an order for the recovery of solicitors files. Where a warrant for searching a solicitor's office is authorised in a situation that legal privilege is being asserted then there ought to be a provision of independent supervision of the police search by a commissioner appointed by the Court or alternatively a condition attached that requires any material seized to be sealed unread and delivered to the Court to enable it to adjudicate upon the issue of confidentiality. This is a useful reminder that many commercial disputes could have a potential criminal aspect but clients' interests will be given proper protection against inappropriate actions of the prosecuting authority under the historical principles of client confidentiality and legal privilege. For specific advice on recovery of evidence, legal privilege or other regulatory matters, please contact Graham Reid who is a commercial litigation and dispute resolution partner in our Edinburgh office. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{B2848C1B-D754-481D-8BC1-8FA4EFF694FB}https://www.shoosmiths.co.uk/client-resources/legal-updates/health-and-safety-scotland-11942.aspxHealth and safety - Scotland It will be interesting to see whether the recent fine of £5m on the operator of Alton Towers has any influence on the future approach to be taken by Scottish Courts in Health and Safety sentencing. Following an accident that took place at a Power Station in Fife where their employee suffered scalding after being engulfed by steam, Scottish Power were fined £1.75m in May 2016. The company had known about the defect which caused the accident for more than four years but nothing was done to repair it. The Court was very critical of the company's failings and categorised its culpability as high. The Court would have imposed a fine of £2.5m but a discount was given due to it having pled guilty prior to Trial. That decision, which imposes the highest non-fatal Health and Safety fine ever levelled in Scotland, will be scrutinised in an appeal that is due to be heard later this year. One of the issues of the appeal will no doubt be the extent to which the Scottish Courts should be influenced by the Health &amp; Safety Sentencing Guidelines that came into force on 1 February 2016 in England and Wales but which do not directly apply to Scotland. The Scottish Government set up the Scottish Sentencing Council ('SSC') in October 2015 but they have not yet addressed this issue. The England and Wales Guidelines set out a range of recommended fines that vary according to the turnover of the company. For example in the case of a large company with an annual turnover over £50 million, the recommended range of fines rises as high as £10 million. It is thought that the fines in both the Scottish Power and Alton Towers cases would fall within with the Guidelines however it is possible that the Appeal Court in Scotland may take the view that the Sheriff in the Scottish Power case was unduly influenced by them having regard to the more modest level of fines that have traditionally been imposed in Scotland. A degree of conformity in sentencing would be desirable both for Prosecutors and Defendants as generally the same Health and Safety legislation and principles apply throughout the UK. However there is undoubtedly an argument to the effect that the particular circumstances and traditions inherent in the Scottish legal system should be respected until such time as the Scottish Parliament legislates, or the SSC produces guidelines, to the contrary. If a regime of substantially increased fines was encouraged, one adverse effect might be many more Health and Safety cases proceeding to trial rather than being disposed of by a negotiated plea of guilty. In that event the consequent demands on court time, not to mention the likely increased costs and delays to all concerned, might be viewed as an outcome to be avoided. For specific advice on Scottish Health and Safety or other regulatory matters, please contact Graham Reid who is a Commercial Litigation and Dispute Resolution Partner in our Edinburgh Office. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Wed, 05 Oct 2016 00:00:00 +0100<![CDATA[Alex Bishop ]]><![CDATA[ It will be interesting to see whether the recent fine of £5m on the operator of Alton Towers has any influence on the future approach to be taken by Scottish Courts in Health and Safety sentencing. Following an accident that took place at a Power Station in Fife where their employee suffered scalding after being engulfed by steam, Scottish Power were fined £1.75m in May 2016. The company had known about the defect which caused the accident for more than four years but nothing was done to repair it. The Court was very critical of the company's failings and categorised its culpability as high. The Court would have imposed a fine of £2.5m but a discount was given due to it having pled guilty prior to Trial. That decision, which imposes the highest non-fatal Health and Safety fine ever levelled in Scotland, will be scrutinised in an appeal that is due to be heard later this year. One of the issues of the appeal will no doubt be the extent to which the Scottish Courts should be influenced by the Health &amp; Safety Sentencing Guidelines that came into force on 1 February 2016 in England and Wales but which do not directly apply to Scotland. The Scottish Government set up the Scottish Sentencing Council ('SSC') in October 2015 but they have not yet addressed this issue. The England and Wales Guidelines set out a range of recommended fines that vary according to the turnover of the company. For example in the case of a large company with an annual turnover over £50 million, the recommended range of fines rises as high as £10 million. It is thought that the fines in both the Scottish Power and Alton Towers cases would fall within with the Guidelines however it is possible that the Appeal Court in Scotland may take the view that the Sheriff in the Scottish Power case was unduly influenced by them having regard to the more modest level of fines that have traditionally been imposed in Scotland. A degree of conformity in sentencing would be desirable both for Prosecutors and Defendants as generally the same Health and Safety legislation and principles apply throughout the UK. However there is undoubtedly an argument to the effect that the particular circumstances and traditions inherent in the Scottish legal system should be respected until such time as the Scottish Parliament legislates, or the SSC produces guidelines, to the contrary. If a regime of substantially increased fines was encouraged, one adverse effect might be many more Health and Safety cases proceeding to trial rather than being disposed of by a negotiated plea of guilty. In that event the consequent demands on court time, not to mention the likely increased costs and delays to all concerned, might be viewed as an outcome to be avoided. For specific advice on Scottish Health and Safety or other regulatory matters, please contact Graham Reid who is a Commercial Litigation and Dispute Resolution Partner in our Edinburgh Office. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{209F46D6-B608-4BE7-89ED-69B78E243C8A}https://www.shoosmiths.co.uk/client-resources/legal-updates/alton-towers-fined-5m-for-accident-11914.aspxAlton Towers fined &#163;5m for &#39;needless and avoidable&#39; accident A day after the Health & Safety Executive announced it would be prosecuting the manufacturer of an ejector seat which fatally deployed while a Hawk jet was on the ground, a Midlands' Court has handed down a record fine for a non-fatal accident in the UK. Merlin Attractions Operations Limited ('Merlin') was fined £5 million as the result of what the judge described as a 'needless and avoidable accident' on its Smiler roller coaster at Alton Towers in June 2015. The accident which was 'exacerbated by the design' left several people injured, including two teenagers who suffered amputations as a result. In sentencing Merlin, the judge referred to Merlin's previous convictions from their Warwick Castle site. Despite having a good health and safety record, the words of the judge from the Warwick Castle case, which also involved the lack of a suitable and sufficient risk assessment, should according to the judge 'have been ringing in the ears when they opened the Smiler'. The fine is not a major surprise to those in the field who have been seeing the new Sentencing Guidelines for Health &amp; Safety applied since 1 February 2016, but the application of the guidelines is of interest, including the categorisation of harm and culpability, as well as the positioning of the company by the judge as a 'large company', despite its £300M plus turnover, more than six times the starting point for 'large' companies under the guidelines. The judge agreed with the HSE that the applicable categorisation was of high culpability and harm for a 'large company'. Accordingly, the applicable fine level was category one which meant his starting point was between £2m and £6m. Despite full credit being given for a very early guilty plea and a prompt admission of responsibility, which allowed the criminal case to be disposed of within 15 months of the incident itself, the fine is towards the top end of the recommended range which the judge was applying in the case. The previous highest fine for a non-fatal accident was £3 million following an uncontrolled release on an oil platform in the North Sea. It has been more than 10 years since Balfour Beatty were fined £7.5M for the Hatfield rail disaster and Transco were fined £15M for the Larkhall gas explosion (the highest fines for multiple fatal accidents in English and Scottish courts, respectively). However, fines have generally been on the increase since late 2015, with several fines in the £1M+ bracket, previously reserved only for major accidents with mass exposure to risk. Sentencing Guidelines have now been implemented for a range of regulatory offences from safety to food hygiene breaches, environmental disasters to bribery. Businesses should be on notice that regulatory fines may be much more significant in future. The prospect of larger fines provides an even greater incentive, if one was needed, for companies to prioritise compliance and, in health and safety, to embed a safety culture in all parts of their businesses. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Wed, 28 Sep 2016 00:00:00 +0100<![CDATA[Philip Ryan Roy Tozer ]]><![CDATA[ A day after the Health & Safety Executive announced it would be prosecuting the manufacturer of an ejector seat which fatally deployed while a Hawk jet was on the ground, a Midlands' Court has handed down a record fine for a non-fatal accident in the UK. Merlin Attractions Operations Limited ('Merlin') was fined £5 million as the result of what the judge described as a 'needless and avoidable accident' on its Smiler roller coaster at Alton Towers in June 2015. The accident which was 'exacerbated by the design' left several people injured, including two teenagers who suffered amputations as a result. In sentencing Merlin, the judge referred to Merlin's previous convictions from their Warwick Castle site. Despite having a good health and safety record, the words of the judge from the Warwick Castle case, which also involved the lack of a suitable and sufficient risk assessment, should according to the judge 'have been ringing in the ears when they opened the Smiler'. The fine is not a major surprise to those in the field who have been seeing the new Sentencing Guidelines for Health &amp; Safety applied since 1 February 2016, but the application of the guidelines is of interest, including the categorisation of harm and culpability, as well as the positioning of the company by the judge as a 'large company', despite its £300M plus turnover, more than six times the starting point for 'large' companies under the guidelines. The judge agreed with the HSE that the applicable categorisation was of high culpability and harm for a 'large company'. Accordingly, the applicable fine level was category one which meant his starting point was between £2m and £6m. Despite full credit being given for a very early guilty plea and a prompt admission of responsibility, which allowed the criminal case to be disposed of within 15 months of the incident itself, the fine is towards the top end of the recommended range which the judge was applying in the case. The previous highest fine for a non-fatal accident was £3 million following an uncontrolled release on an oil platform in the North Sea. It has been more than 10 years since Balfour Beatty were fined £7.5M for the Hatfield rail disaster and Transco were fined £15M for the Larkhall gas explosion (the highest fines for multiple fatal accidents in English and Scottish courts, respectively). However, fines have generally been on the increase since late 2015, with several fines in the £1M+ bracket, previously reserved only for major accidents with mass exposure to risk. Sentencing Guidelines have now been implemented for a range of regulatory offences from safety to food hygiene breaches, environmental disasters to bribery. Businesses should be on notice that regulatory fines may be much more significant in future. The prospect of larger fines provides an even greater incentive, if one was needed, for companies to prioritise compliance and, in health and safety, to embed a safety culture in all parts of their businesses. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{3483D4D1-C8A2-49A4-BA22-2B977F2DD7F4}https://www.shoosmiths.co.uk/client-resources/legal-updates/modern-slavery-statements-due-september-2016-11696.aspxModern slavery: statements due September 2016 Organisations with a financial year end from 31 March 2016 must publish their modern slavery statement by next month. Has your organisation complied? As athletes line up to race for medals at the Olympics in Rio, the race to drive up standards and comply with the Modern Slavery Act 2015 is becoming a sprint. The Modern Slavery Act 2015 requires commercial organisations, supplying goods or services, with a turnover of £36 million or above to publish an annual statement setting out what they are doing to ensure that there is no modern slavery both in their own organisation and in any of their supply chains. The turnover calculation includes those organisations that are only carrying out part of their business in the UK, as well as including the turnover of foreign subsidiaries, so supply chains can be complex particularly as services are caught as well as goods. The provisions came into force on 29 October 2015, however organisations were given some breathing space to comply. Transitional provisions provided that organisations with a financial year-end from 29 October up to and including 30 March 2016 are not required to make a slavery and human trafficking statement for the financial year 2015/16. Organisations with a financial year-end of 31 March 2016 onwards are required to publish a slavery and human trafficking statement for the financial year 2015/16 within 6 months of their financial year. For some, this could mean they have until September 2016 to comply. Time is ticking. We have previously reported on what organisations need to do to comply. We have an expert team available to advise and assist together with an e-learning course. Make sure your organisation is not left standing in the starting blocks. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Fri, 12 Aug 2016 00:00:00 +0100<![CDATA[Hayley Saunders ]]><![CDATA[ Organisations with a financial year end from 31 March 2016 must publish their modern slavery statement by next month. Has your organisation complied? As athletes line up to race for medals at the Olympics in Rio, the race to drive up standards and comply with the Modern Slavery Act 2015 is becoming a sprint. The Modern Slavery Act 2015 requires commercial organisations, supplying goods or services, with a turnover of £36 million or above to publish an annual statement setting out what they are doing to ensure that there is no modern slavery both in their own organisation and in any of their supply chains. The turnover calculation includes those organisations that are only carrying out part of their business in the UK, as well as including the turnover of foreign subsidiaries, so supply chains can be complex particularly as services are caught as well as goods. The provisions came into force on 29 October 2015, however organisations were given some breathing space to comply. Transitional provisions provided that organisations with a financial year-end from 29 October up to and including 30 March 2016 are not required to make a slavery and human trafficking statement for the financial year 2015/16. Organisations with a financial year-end of 31 March 2016 onwards are required to publish a slavery and human trafficking statement for the financial year 2015/16 within 6 months of their financial year. For some, this could mean they have until September 2016 to comply. Time is ticking. We have previously reported on what organisations need to do to comply. We have an expert team available to advise and assist together with an e-learning course. Make sure your organisation is not left standing in the starting blocks. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{9E1E4413-C176-4B7B-92E7-142FB5B0C264}https://www.shoosmiths.co.uk/news/press-releases/11454.aspxEU Referendum result: Shoosmiths experts comment Shoosmiths' experts in competition, employment, real estate, corporate and commercial comment on the EU referendum result. Competition Law Simon Barnes, head of EU and competition at Shoosmiths The UK's competition laws mirror that of the EU's, therefore the vote to leave should in principle have very little, if any, effect on the competition law assessment of commercial agreements. The leave vote could see changes in how competition law applies to certain types of commercial arrangement, such as distribution and licensing agreements, as the current rules come from the European Commission block exemption regulations and guidelines. These could be discarded now that we have opted out of the EU. Disparities between the UK and EU's competition laws may emerge in the long term when differences in levels of enforcement and court judgements become apparent. Should the EU guidance be repealed, both the lawfulness of commercial arrangements and the compliance to varying rules in different jurisdictions will be a concern for businesses. The EU Merger Regulation will now cease to apply with deals in future potentially having to be reviewed under both the Merger Regulation and the UK's domestic merger rules. Control of State aid can now be retained by the UK, possibly allowing the UK to benefit from public support by way of grants and favourable tax regimes. However, respecting the existing EU rules on this may prove crucial in securing access to the EU single market. Similarly the existing public procurement regime will most likely stay put to promote competitiveness in public tender processes and act as a tool in negotiating single market access. Employment Law Charles Rae, employment partner at Shoosmiths Now that the UK has voted to leave the EU, once Brexit is completed the Government could in theory decide to repeal or revise a significant proportion of the UK's employment laws, where these are laws that are required as part of the UK's membership of the EU. A number of employment laws fall into this category, such as many of the anti-discrimination rights, transfer of undertakings regulations, family leave entitlements, collective consultation obligations, duties to agency workers or working time regulations. However, any kind of wholesale change seems unlikely for a number of reasons. Many of the laws in question have become so ingrained within UK businesses that it seems unlikely the Government would take steps to significantly change or remove them, especially where they provide rights to employees that have become widely accepted and valued. Moreover, much of the UK's employment legislation pre-dates the EU imposed ones, and have instead been built upon by later EU requirements, so the foundations are already in place. For instance, the UK already had race and disability discrimination rules before the EU wide requirements were introduced. Many feel that more likely than repealing laws, the Government would take the opportunity to smooth off some of the less popular requirements set down by the EU, for example restrictions on changing terms and conditions following a TUPE transfer. We may also find that freedom of movement within the EU leaves uncertainty as to the status of EU nationals who already work in the UK (and vice versa). Many businesses rely on EU workers and will want to be satisfied that their right to remain in the UK (and to therefore provide their services) is not going to be adversely affected. Equally, it isn't clear what a Brexit will mean for EU nationals currently working in the UK. Many potential solutions have been mooted, such as a compromise that would see current EU migrants given a set period of time to remain in the UK during which they can apply for citizenship, in return for UK citizens currently abroad to remain where they are on the same basis. Real Estate Simon Boss, real estate partner at Shoosmiths Given that the commercial real estate deals flow has already been impacted by the uncertainty that abounded in the run up to the referendum, we may see some clients putting deals on hold in the wake of the leave result. Equally, we may see some pick up in transactions as some investors look to reduce their exposure to the UK market. For some funds and investors this may present an opportunity to acquire at an attractive price. Since its creation, no Member State has ever left the European Union so we have no clear precedent in regards to what happens next and this is as much the case for the real estate sector as it is for the wider commercial arena. Withdrawal from the EU could have major implications for the construction industry, which is already tackling a labour shortage. Tightened immigration control could now exacerbate this issue, given that a large percentage of EU immigrants work in the construction sector. What many will be waiting most anxiously to determine though is how far foreign investment into British real estate will be impacted by our withdrawal from the EU. Will the position of Britain as a primary choice for commercial real estate investment in Europe suffer? Until some certainty returns to the market, this could well reduce the UK's reputation as a safe haven for real estate investment. Corporate - Private Equity Kieran Toal, corporate partner at Shoosmiths We're now in uncharted waters - no member state has left the EU since its inception and how the economy and UK businesses will fare is hard to predict. However in terms of the Private Equity market, we are dealing with the relative unknown, but investors still need to invest. Admittedly there may be a slow start while buyers take stock but, once the wheels begin to turn, there is a plethora of cash-rich private equity houses with capital to invest and UK businesses with rich growth potential aren't going to lose their appeal overnight. There may well be a shift in focus, with businesses which are particularly reliant on European markets becoming less attractive propositions. But for the most part, likelihood is that the inertia caused by uncertainty over the vote will slowly lift. Commercial - Creative industries Laura Harper, partner in the national Intellectual Property &amp; Creative Industries group and head of the IP &amp; Creative Industries at Shoosmiths I think there is going to be concern and disappointment in the creative industries at this outcome. There are many questions that will have to be answered around funding, free movement of people and collaboration across film, television and the performing arts. Certainly it's no exaggeration to say regulation around Trade Mark protection is going to need redrafting creating uncertainty for companies here and abroad who own EU Trade Marks. The 'out' vote means there is going to have to be a transitional period where companies who have an EU Trade Mark will potentially lose protection in the UK and they will need to audit their TM portfolios to identify the areas which will require attention to ensure they apply for the necessary national coverage. As legal advisers we will provide advice on the basis that UK protection under EU trade marks will be eventually lost until we receive clarity on the transitional provisions to ensure that our clients' interests are fully protected. The patent system has taken decades to negotiate - the Unified Patent and Unified Patent Court was due to be implemented in 2017. With this vote this will probably be delayed and add an extra layer of process to the new Unified Patent and Court procedure.Fri, 24 Jun 2016 00:00:00 +0100<![CDATA[ Shoosmiths' experts in competition, employment, real estate, corporate and commercial comment on the EU referendum result. Competition Law Simon Barnes, head of EU and competition at Shoosmiths The UK's competition laws mirror that of the EU's, therefore the vote to leave should in principle have very little, if any, effect on the competition law assessment of commercial agreements. The leave vote could see changes in how competition law applies to certain types of commercial arrangement, such as distribution and licensing agreements, as the current rules come from the European Commission block exemption regulations and guidelines. These could be discarded now that we have opted out of the EU. Disparities between the UK and EU's competition laws may emerge in the long term when differences in levels of enforcement and court judgements become apparent. Should the EU guidance be repealed, both the lawfulness of commercial arrangements and the compliance to varying rules in different jurisdictions will be a concern for businesses. The EU Merger Regulation will now cease to apply with deals in future potentially having to be reviewed under both the Merger Regulation and the UK's domestic merger rules. Control of State aid can now be retained by the UK, possibly allowing the UK to benefit from public support by way of grants and favourable tax regimes. However, respecting the existing EU rules on this may prove crucial in securing access to the EU single market. Similarly the existing public procurement regime will most likely stay put to promote competitiveness in public tender processes and act as a tool in negotiating single market access. Employment Law Charles Rae, employment partner at Shoosmiths Now that the UK has voted to leave the EU, once Brexit is completed the Government could in theory decide to repeal or revise a significant proportion of the UK's employment laws, where these are laws that are required as part of the UK's membership of the EU. A number of employment laws fall into this category, such as many of the anti-discrimination rights, transfer of undertakings regulations, family leave entitlements, collective consultation obligations, duties to agency workers or working time regulations. However, any kind of wholesale change seems unlikely for a number of reasons. Many of the laws in question have become so ingrained within UK businesses that it seems unlikely the Government would take steps to significantly change or remove them, especially where they provide rights to employees that have become widely accepted and valued. Moreover, much of the UK's employment legislation pre-dates the EU imposed ones, and have instead been built upon by later EU requirements, so the foundations are already in place. For instance, the UK already had race and disability discrimination rules before the EU wide requirements were introduced. Many feel that more likely than repealing laws, the Government would take the opportunity to smooth off some of the less popular requirements set down by the EU, for example restrictions on changing terms and conditions following a TUPE transfer. We may also find that freedom of movement within the EU leaves uncertainty as to the status of EU nationals who already work in the UK (and vice versa). Many businesses rely on EU workers and will want to be satisfied that their right to remain in the UK (and to therefore provide their services) is not going to be adversely affected. Equally, it isn't clear what a Brexit will mean for EU nationals currently working in the UK. Many potential solutions have been mooted, such as a compromise that would see current EU migrants given a set period of time to remain in the UK during which they can apply for citizenship, in return for UK citizens currently abroad to remain where they are on the same basis. Real Estate Simon Boss, real estate partner at Shoosmiths Given that the commercial real estate deals flow has already been impacted by the uncertainty that abounded in the run up to the referendum, we may see some clients putting deals on hold in the wake of the leave result. Equally, we may see some pick up in transactions as some investors look to reduce their exposure to the UK market. For some funds and investors this may present an opportunity to acquire at an attractive price. Since its creation, no Member State has ever left the European Union so we have no clear precedent in regards to what happens next and this is as much the case for the real estate sector as it is for the wider commercial arena. Withdrawal from the EU could have major implications for the construction industry, which is already tackling a labour shortage. Tightened immigration control could now exacerbate this issue, given that a large percentage of EU immigrants work in the construction sector. What many will be waiting most anxiously to determine though is how far foreign investment into British real estate will be impacted by our withdrawal from the EU. Will the position of Britain as a primary choice for commercial real estate investment in Europe suffer? Until some certainty returns to the market, this could well reduce the UK's reputation as a safe haven for real estate investment. Corporate - Private Equity Kieran Toal, corporate partner at Shoosmiths We're now in uncharted waters - no member state has left the EU since its inception and how the economy and UK businesses will fare is hard to predict. However in terms of the Private Equity market, we are dealing with the relative unknown, but investors still need to invest. Admittedly there may be a slow start while buyers take stock but, once the wheels begin to turn, there is a plethora of cash-rich private equity houses with capital to invest and UK businesses with rich growth potential aren't going to lose their appeal overnight. There may well be a shift in focus, with businesses which are particularly reliant on European markets becoming less attractive propositions. But for the most part, likelihood is that the inertia caused by uncertainty over the vote will slowly lift. Commercial - Creative industries Laura Harper, partner in the national Intellectual Property &amp; Creative Industries group and head of the IP &amp; Creative Industries at Shoosmiths I think there is going to be concern and disappointment in the creative industries at this outcome. There are many questions that will have to be answered around funding, free movement of people and collaboration across film, television and the performing arts. Certainly it's no exaggeration to say regulation around Trade Mark protection is going to need redrafting creating uncertainty for companies here and abroad who own EU Trade Marks. The 'out' vote means there is going to have to be a transitional period where companies who have an EU Trade Mark will potentially lose protection in the UK and they will need to audit their TM portfolios to identify the areas which will require attention to ensure they apply for the necessary national coverage. As legal advisers we will provide advice on the basis that UK protection under EU trade marks will be eventually lost until we receive clarity on the transitional provisions to ensure that our clients' interests are fully protected. The patent system has taken decades to negotiate - the Unified Patent and Unified Patent Court was due to be implemented in 2017. With this vote this will probably be delayed and add an extra layer of process to the new Unified Patent and Court procedure.]]>{F9251532-4973-42BA-BC02-3A789FB2CAB2}https://www.shoosmiths.co.uk/client-resources/legal-updates/modern-slavery-legislation-a-global-outlook-11250.aspxModern slavery legislation: a global outlook The UK is leading the way in the fight against modern slavery through the Modern Slavery Act 2015. Is the UK legislation the gold standard? The Modern Slavery Act 2015 has global reach as supply chains stretch across the world. A global trend of anti-slavery campaigns and legislation has begun. United Nations (UN) The UN Global Compact is a global agreement on 10 principles, including Principle 4: the elimination of all forms of forced and compulsory labour. It is a voluntary initiative based on commitments by CEOs to implement sustainability principles and to take steps to support UN goals. The initiative enjoys support from the G8. Separately, the UN has published its UN Guiding Principles on Business and Human Rights which has inspired human rights initiatives around the world. Individual country initiatives A number of countries have recognised the problem and we understand are looking at various initiatives. Countries which are attempting to pass legislation include France, Switzerland and the United States. France On 30 March 2015 the French parliament passed Private Bill 501. Before it becomes law, it must go to the French Senate which has the right to change the wording of the Bill. It was sent to the Senate on 24 March 2016. Thereafter, the Bill must receive Presidential approval to become law. If it becomes law, the Bill will apply to French companies with over 5,000 employees based in France or 10,000 employees globally (if those employees are under the French company's direct control). Those companies within the employee threshold must prepare a 'plan de vigilance' (a Plan) setting out the oversight mechanisms which the company has in place to identify and mitigate against the following risks: Human rights and fundamental freedoms Impact to health Serious impact to the environment Personal injury The Plan must include activities of subsidiaries and of subcontractors and suppliers where there is an established contractual relationship. The Plan must be made public and included in the company report that publicises the remuneration of officers of the company. The first Plans must be prepared and published by 31 December 2016. The proposed penalty for non-compliance is a non-tax deductible fine of up to 10 million Euros. Switzerland A Responsible Business Initiative campaign has been instigated in Switzerland by the Swiss Coalition for Corporate Justice. The campaign proposes an amendment to the Swiss constitution. It is understood the initiative was influenced by the UN Guiding Principles on Business and Human Rights. If successful, businesses would be required to carry out due diligence to: identify impacts (both real and potential) on internationally recognised human rights issues and environmental standards stop existing violations to account for the actions they have taken The law would attract civil liability to enable people adversely affected by international activities of Swiss companies to bring a claim for damages against the Swiss company in Switzerland. The campaign has gathered enough signatures and the initiative will be considered by the Swiss government in October 2016. Thereafter Swiss citizens will decide the future of the initiative when it is put to them in a referendum. The Netherlands The Dutch government are focussing on sustainable garment production and textile supply chain. With the guidance of the Social and Economic Council of the Netherlands, they have tabled an agreement to adopt a collaborative approach with a coalition of industry, trade unions and civil society organisations. The proposed agreement to tackle human rights and environmental issues including the following: protection from forced and child labour safe conditions for employees achieving a living wage reduction of excessively long working days dialogue with independent employee representatives Counties including Bangladesh, India, Pakistan and Turkey will receive particular focus. Parties to the agreement will work together to identify supply chain issues at all stages of the chain, to set objectives which are achievable within three to five years and to draw up an annual improvement plan. The parties will input into a joint report each year setting out the activities carried out and what they have achieved. From year three, parties will report individually on progress they have made. Funding is being sought for the agreement which it is hoped will be signed in June 2016. It is hoped that the company signatories will represent at least 30% of sector sales in the Netherlands. Qatar Following a complaint by the International Labour Organisation, Qatar is proposing to introduce a new law to end the kafala system whereby migrant workers can only work for their sponsor. Under this system, workers cannot change employer or leave the country without their employer's approval. The International Labour Organisation has told Qatar to prove its proposed law changes are working or the ILO could launch a 'commission of inquiry' in March 2017. USA There is an appetite in the United States to achieve greater transparency in the supply chain, disclosure requirements and the traceability of materials within supply chains to ensure materials sourced are free of human rights abuses. The leading pieces of supply chain transparency legislation in force in the United States are the Dodd Frank Wall Street Reform and Consumer Protection Act, Section 1502 regarding conflict minerals and the California Transparency in Supply Chains Act 2010. We have previously reported on a case brought under the Californian Act and whether the UK Modern Slavery Act will develop in the same way. In addition to the above, a federal bill, Business Transparency in Trafficking and Slavery Act (H.R. 3226), is understood to be in Committee stages. We understand that HR 3226 is a federal bill which aims to provide consumers with better clarity to determine whether their purchases are free from slavery, human trafficking, child and forced labour. If enacted, any 'covered issuer required to file reports with the Securities and Exchange Commission (SEC)' under Section 13 of the Exchange Act with global receipts of $100 million, will be required to submit an annual report to the SEC regarding the steps taken to assess and address slavery, human trafficking, child and forced labour within their supply chains. The report will be published on the SEC's website as well as on the issuer's website through a prominent link to the relevant information labelled 'Global Supply Chain Transparency.' It is not clear whether it includes goods as well as services. The proposed mandatory disclosure requirements include: supplier audit and a requirement that suppliers ensure that recruitment of labour and manufacture of products take place in compliance with local laws relating to child and forced labour and human trafficking training of company staff in relation to supply chain management and child and forced labour and human trafficking details of the action plan in place if an instance of child or forced labour and human trafficking is found together with the details of the victim support available. Policies in place to mitigate, evaluate and assess the risk of forced and child labour, slavery and human trafficking in the company supply chain How compliance with policies is tracked internally and how policy breaches are corrected The Bill was referred to Committee on 27 July 2015. It is reputed to have a 2% chance of being enacted. Australia Australia's Criminal Code has included anti-slavery and human trafficking offences since 1995. The Code includes the following offences for conduct both inside and outside Australia: Slave trading, human trafficking or be involved with a commercial transaction involving slavery - 25 years imprisonment Conducting a business involving forced labour or causing another person into forced labour - 12 years imprisonment Criminal liability will also arise if an organisation provides finance intentionally or recklessly 'to any commercial transaction' involving slavery, Furthermore, there is automatic criminal liability if an organisation provides finance to a business involving servitude or forced labour. It is possible to defend liability if an organisation has carried out due diligence to prevent slavery in its supply chain or to have a culture within the organisation that does not allow slavery like conditions. On the other hand, if an organisation is not able to put forward such a defence that could be taken as evidence against it. Hong Kong In Hong Kong it is an offence, punishable by a maximum prison sentence of 10 years, to traffic persons into the territory for the purpose of prostitution. In addition. If a person fails to make a disclosure to the Hong Kong Joint Financial Intelligence Unit where that person suspects or knows that property is the proceeds of an indictable offence or if a person deals in the proceeds of slavery or human trafficking, they will commit an offence under the Organised and Serious Crimes Ordinance (Cap 455). Brazil Brazil is a high risk country for the purposes of modern slavery because it has large construction, agriculture and garment industries where forced labour is rife. In response to the problem, in 2004 Brazil developed the Lista Suja: The Dirty List which 'named and shamed' companies who use forced labour in their supply chains. The Dirty List was updated every six months and was fully searchable. It included: The owner of the company Where the offence took place The number of workers subjected to forced labour Consequences of being on the Dirty List were extremely damaging ranging from brand damage to fines and the loss of lending opportunities. As a result, in December 2014 the Dirty List was suspended in response to pressure from industries and financial penalties were suspended. A new list was put forward on 31 March 2015 but as far as we are aware, has not been released. Conclusion It is clear that the abolition of human trafficking, slavery, forced and child labour is high on the International agenda. Corporate values and culture are gradually changing but the race to the top will take time. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Mon, 25 Apr 2016 00:00:00 +0100<![CDATA[Hayley Saunders ]]><![CDATA[ The UK is leading the way in the fight against modern slavery through the Modern Slavery Act 2015. Is the UK legislation the gold standard? The Modern Slavery Act 2015 has global reach as supply chains stretch across the world. A global trend of anti-slavery campaigns and legislation has begun. United Nations (UN) The UN Global Compact is a global agreement on 10 principles, including Principle 4: the elimination of all forms of forced and compulsory labour. It is a voluntary initiative based on commitments by CEOs to implement sustainability principles and to take steps to support UN goals. The initiative enjoys support from the G8. Separately, the UN has published its UN Guiding Principles on Business and Human Rights which has inspired human rights initiatives around the world. Individual country initiatives A number of countries have recognised the problem and we understand are looking at various initiatives. Countries which are attempting to pass legislation include France, Switzerland and the United States. France On 30 March 2015 the French parliament passed Private Bill 501. Before it becomes law, it must go to the French Senate which has the right to change the wording of the Bill. It was sent to the Senate on 24 March 2016. Thereafter, the Bill must receive Presidential approval to become law. If it becomes law, the Bill will apply to French companies with over 5,000 employees based in France or 10,000 employees globally (if those employees are under the French company's direct control). Those companies within the employee threshold must prepare a 'plan de vigilance' (a Plan) setting out the oversight mechanisms which the company has in place to identify and mitigate against the following risks: Human rights and fundamental freedoms Impact to health Serious impact to the environment Personal injury The Plan must include activities of subsidiaries and of subcontractors and suppliers where there is an established contractual relationship. The Plan must be made public and included in the company report that publicises the remuneration of officers of the company. The first Plans must be prepared and published by 31 December 2016. The proposed penalty for non-compliance is a non-tax deductible fine of up to 10 million Euros. Switzerland A Responsible Business Initiative campaign has been instigated in Switzerland by the Swiss Coalition for Corporate Justice. The campaign proposes an amendment to the Swiss constitution. It is understood the initiative was influenced by the UN Guiding Principles on Business and Human Rights. If successful, businesses would be required to carry out due diligence to: identify impacts (both real and potential) on internationally recognised human rights issues and environmental standards stop existing violations to account for the actions they have taken The law would attract civil liability to enable people adversely affected by international activities of Swiss companies to bring a claim for damages against the Swiss company in Switzerland. The campaign has gathered enough signatures and the initiative will be considered by the Swiss government in October 2016. Thereafter Swiss citizens will decide the future of the initiative when it is put to them in a referendum. The Netherlands The Dutch government are focussing on sustainable garment production and textile supply chain. With the guidance of the Social and Economic Council of the Netherlands, they have tabled an agreement to adopt a collaborative approach with a coalition of industry, trade unions and civil society organisations. The proposed agreement to tackle human rights and environmental issues including the following: protection from forced and child labour safe conditions for employees achieving a living wage reduction of excessively long working days dialogue with independent employee representatives Counties including Bangladesh, India, Pakistan and Turkey will receive particular focus. Parties to the agreement will work together to identify supply chain issues at all stages of the chain, to set objectives which are achievable within three to five years and to draw up an annual improvement plan. The parties will input into a joint report each year setting out the activities carried out and what they have achieved. From year three, parties will report individually on progress they have made. Funding is being sought for the agreement which it is hoped will be signed in June 2016. It is hoped that the company signatories will represent at least 30% of sector sales in the Netherlands. Qatar Following a complaint by the International Labour Organisation, Qatar is proposing to introduce a new law to end the kafala system whereby migrant workers can only work for their sponsor. Under this system, workers cannot change employer or leave the country without their employer's approval. The International Labour Organisation has told Qatar to prove its proposed law changes are working or the ILO could launch a 'commission of inquiry' in March 2017. USA There is an appetite in the United States to achieve greater transparency in the supply chain, disclosure requirements and the traceability of materials within supply chains to ensure materials sourced are free of human rights abuses. The leading pieces of supply chain transparency legislation in force in the United States are the Dodd Frank Wall Street Reform and Consumer Protection Act, Section 1502 regarding conflict minerals and the California Transparency in Supply Chains Act 2010. We have previously reported on a case brought under the Californian Act and whether the UK Modern Slavery Act will develop in the same way. In addition to the above, a federal bill, Business Transparency in Trafficking and Slavery Act (H.R. 3226), is understood to be in Committee stages. We understand that HR 3226 is a federal bill which aims to provide consumers with better clarity to determine whether their purchases are free from slavery, human trafficking, child and forced labour. If enacted, any 'covered issuer required to file reports with the Securities and Exchange Commission (SEC)' under Section 13 of the Exchange Act with global receipts of $100 million, will be required to submit an annual report to the SEC regarding the steps taken to assess and address slavery, human trafficking, child and forced labour within their supply chains. The report will be published on the SEC's website as well as on the issuer's website through a prominent link to the relevant information labelled 'Global Supply Chain Transparency.' It is not clear whether it includes goods as well as services. The proposed mandatory disclosure requirements include: supplier audit and a requirement that suppliers ensure that recruitment of labour and manufacture of products take place in compliance with local laws relating to child and forced labour and human trafficking training of company staff in relation to supply chain management and child and forced labour and human trafficking details of the action plan in place if an instance of child or forced labour and human trafficking is found together with the details of the victim support available. Policies in place to mitigate, evaluate and assess the risk of forced and child labour, slavery and human trafficking in the company supply chain How compliance with policies is tracked internally and how policy breaches are corrected The Bill was referred to Committee on 27 July 2015. It is reputed to have a 2% chance of being enacted. Australia Australia's Criminal Code has included anti-slavery and human trafficking offences since 1995. The Code includes the following offences for conduct both inside and outside Australia: Slave trading, human trafficking or be involved with a commercial transaction involving slavery - 25 years imprisonment Conducting a business involving forced labour or causing another person into forced labour - 12 years imprisonment Criminal liability will also arise if an organisation provides finance intentionally or recklessly 'to any commercial transaction' involving slavery, Furthermore, there is automatic criminal liability if an organisation provides finance to a business involving servitude or forced labour. It is possible to defend liability if an organisation has carried out due diligence to prevent slavery in its supply chain or to have a culture within the organisation that does not allow slavery like conditions. On the other hand, if an organisation is not able to put forward such a defence that could be taken as evidence against it. Hong Kong In Hong Kong it is an offence, punishable by a maximum prison sentence of 10 years, to traffic persons into the territory for the purpose of prostitution. In addition. If a person fails to make a disclosure to the Hong Kong Joint Financial Intelligence Unit where that person suspects or knows that property is the proceeds of an indictable offence or if a person deals in the proceeds of slavery or human trafficking, they will commit an offence under the Organised and Serious Crimes Ordinance (Cap 455). Brazil Brazil is a high risk country for the purposes of modern slavery because it has large construction, agriculture and garment industries where forced labour is rife. In response to the problem, in 2004 Brazil developed the Lista Suja: The Dirty List which 'named and shamed' companies who use forced labour in their supply chains. The Dirty List was updated every six months and was fully searchable. It included: The owner of the company Where the offence took place The number of workers subjected to forced labour Consequences of being on the Dirty List were extremely damaging ranging from brand damage to fines and the loss of lending opportunities. As a result, in December 2014 the Dirty List was suspended in response to pressure from industries and financial penalties were suspended. A new list was put forward on 31 March 2015 but as far as we are aware, has not been released. Conclusion It is clear that the abolition of human trafficking, slavery, forced and child labour is high on the International agenda. Corporate values and culture are gradually changing but the race to the top will take time. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{B1933D56-D4AF-4B52-A271-54EF1634C45D}https://www.shoosmiths.co.uk/client-resources/legal-updates/modern-slavery-countdown-to-compliance-11124.aspxModern Slavery - Countdown to compliance Transitional provisions are running out fast. Organisations with a financial year end from 31 March 2016 must publish their statement within 6 months of that year end. Is your organisation ready? The Modern Slavery Act 2015 requires commercial organisations, supplying goods or services, with a turnover of £36 million or above to publish an annual statement setting out what they are doing to ensure that there is no modern slavery both in their own organisation and in any of their supply chains. The turnover calculation includes those organisations that are only carrying out part of their business in the UK, as well as including the turnover of foreign subsidiaries, so supply chains can be complex particularly as services are caught as well as goods. Although the provisions come into force on 29 October 2015, organisations were given some breathing space because transitional provisions provided that organisations with a financial year-end from 29 October up to and including 30 March 2016 are not required to make a slavery and human trafficking statement for the financial year 2015/16. However organisations with a financial year-end of 31 March 2016 onwards are required to publish a slavery and human trafficking statement for the financial year 2015/16 within 6 months of their financial year. For some, this could be as early as the end of September 2016. Time is ticking to comply. We have previously reported on what organisations need to do to comply. An e-learning course is available to assist. The race to the top to drive up standards is gathering pace. For advice on Modern Slavery Act compliance, please contact Ron Reid on 03700 86 8471 or Jos Kirkwood on 03700 86 8347 DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Tue, 29 Mar 2016 00:00:00 +0100<![CDATA[Hayley Saunders ]]><![CDATA[ Transitional provisions are running out fast. Organisations with a financial year end from 31 March 2016 must publish their statement within 6 months of that year end. Is your organisation ready? The Modern Slavery Act 2015 requires commercial organisations, supplying goods or services, with a turnover of £36 million or above to publish an annual statement setting out what they are doing to ensure that there is no modern slavery both in their own organisation and in any of their supply chains. The turnover calculation includes those organisations that are only carrying out part of their business in the UK, as well as including the turnover of foreign subsidiaries, so supply chains can be complex particularly as services are caught as well as goods. Although the provisions come into force on 29 October 2015, organisations were given some breathing space because transitional provisions provided that organisations with a financial year-end from 29 October up to and including 30 March 2016 are not required to make a slavery and human trafficking statement for the financial year 2015/16. However organisations with a financial year-end of 31 March 2016 onwards are required to publish a slavery and human trafficking statement for the financial year 2015/16 within 6 months of their financial year. For some, this could be as early as the end of September 2016. Time is ticking to comply. We have previously reported on what organisations need to do to comply. An e-learning course is available to assist. The race to the top to drive up standards is gathering pace. For advice on Modern Slavery Act compliance, please contact Ron Reid on 03700 86 8471 or Jos Kirkwood on 03700 86 8347 DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{AC1DD402-4EF5-4584-82E1-F2EFE440C9F1}https://www.shoosmiths.co.uk/client-resources/legal-updates/new-company-law-psc-registers-into-force-6-april-11117.aspxNew company law on PSC registers comes into force 6 April 2016 - How to comply and avoid criminal penalties From 6 April 2016, most UK companies, LLPs (limited liability partnerships) and SEs (Societas Europaea) will be required to keep and maintain a register of the persons with significant control over them. Even dormant companies and companies limited by guarantee will be caught by the new law, which places certain legal duties on both companies and the persons with significant control over them. Companies and the persons with significant control over them who fail to comply with their respective duties under the new law face the risk of heavy penalties, ranging from fines (in some cases unlimited) to possible imprisonment. Liability for failure to comply with the new requirements can also extend to a company's directors and secretary. Even if there is no person with significant control over a company, that company will still need to keep a register and make a statement to that effect. To help you understand whether your organisation will be affected by the new law, we have created a brief guide that answers some frequently asked questions and offers you a quick at-a-glance overview of the new requirements, including: whether your organisation needs to keep a register of persons with significant control; how to identify a person with significant control; and what to do if your organisation is controlled by a legal entity instead of a person. Shoosmiths LLP would be happy to advise you on all aspects of compliance with the new requirements. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Thu, 24 Mar 2016 00:00:00 Z<![CDATA[Sian Sadler ]]><![CDATA[ From 6 April 2016, most UK companies, LLPs (limited liability partnerships) and SEs (Societas Europaea) will be required to keep and maintain a register of the persons with significant control over them. Even dormant companies and companies limited by guarantee will be caught by the new law, which places certain legal duties on both companies and the persons with significant control over them. Companies and the persons with significant control over them who fail to comply with their respective duties under the new law face the risk of heavy penalties, ranging from fines (in some cases unlimited) to possible imprisonment. Liability for failure to comply with the new requirements can also extend to a company's directors and secretary. Even if there is no person with significant control over a company, that company will still need to keep a register and make a statement to that effect. To help you understand whether your organisation will be affected by the new law, we have created a brief guide that answers some frequently asked questions and offers you a quick at-a-glance overview of the new requirements, including: whether your organisation needs to keep a register of persons with significant control; how to identify a person with significant control; and what to do if your organisation is controlled by a legal entity instead of a person. Shoosmiths LLP would be happy to advise you on all aspects of compliance with the new requirements. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{539F4432-0AA2-4C27-8CA2-BD13B2B29443}https://www.shoosmiths.co.uk/client-resources/legal-updates/cybercrime-its-a-question-of-when-not-if-for-business-11053.aspxCybercrime: it&#39;s a question of &#39;when&#39;, not &#39;if&#39; for business Businesses face an increasing number of challenges and one of the most severe and potentially damaging is that of cybercrime. Fallout from a cyber-attack can result in both physical as well as reputational damage and the loss of business and customers. FREE DOWNLOAD The first 12 hours matter in a crisis - things happen quickly, they can get out of control. Download your free copy of our Crisis Management flowchart today to identify key dangers, risk areas and opportunities, and to get you on the right track to avoid costly mistakes in the event of any crisis. <!-- .whitepaper --> <!-- .ui-form-note --> Complete the form to start your download. First name Last name Email address Phone number Company If you have any questions, you can review our privacy policy for more information. $(document).ready(function () { if ($('#whitepaperdownloadpanel_WhitepaperPanel').is(":visible")) { $('#WhitepaperDownloadPanel').hide(); } }); $('#DownloadBtn').click(function () { $('#whitepaperdownloadpanel_WhitepaperPanel').show(); $('#WhitepaperDownloadPanel').hide(); }); $('#whitepaperdownloadpanel_WhitepaperFormDownloadButton').click(function () { var pagePosition = $(document).scrollTop(); $('#input_position').val(pagePosition); }); $(document).ready(function () { var pagePosition = ''; $(window).scrollTop(pagePosition); }); $('#whitepaperdownloadpanel_WhitepaperFormDownloadButton').click(function () { $('#whitepaperdownloadpanel_WhitePaperButtonPressed').val('true'); }); <!-- .whitepaper-wrapper --> &quot;The starting point must be that every British company is a target, that every network will be attacked, and that cybercrime is not something that happens to other people... I can tell you that right now GCHQ is monitoring threats against 450 companies.&quot; George Osborne Chancellor <!-- end .quote --> <!-- end .bg-quote --> <!-- end .quote-wrapper --> Chilling words - particularly given how much British businesses now rely on their online presence. It is estimated that internet linked services contributed as much as £294billion to the UK's GDP in 2015 but according to the latest Government Security Breaches Survey (2015), 68% of large organisations and 34% of small organisations surveyed suffered from some form of cyber security breach within the last 12 months (2014-15). It is thought that the overall annual cost of cybercrime to the UK economy could be as much as £34billion with the average cost of the worst security breach for larger organisations being £1.46million - £3.14 million. Last year's very public attack on Talk Talk reminded us of the vulnerabilities of any organisation to a cyberattack. It has been reported that last October's cyberattack cost Talk Talk £60million and the loss of 101,000 customers. Research suggests that UK businesses are dedicating more and more resources to preventing their becoming the latest victim. Statistics suggest 44% of both large and small organisations have increased their spending on information security in the last year. Prevention and defence must always be the fundamental basis to an organisation's approach to cybercrime but with ever changing methods and technologies designed to penetrate an organisation's defences, an increasing focus is being placed on preparing for 'when, not if' a cyberattack strikes. Response team The creation of a response team in preparation for a cyberattack is of vital importance. The first few hours following the discovery of an attack are usually the most crucial and will largely dictate the effect the attack has on an organisation. Any response team created must include a wide breadth of expertise, particularly including IT, PR and legal, to be on hand to advise and deal with the immediate aftermath and discovery of a cyberattack. Everyone within the business should know in advance who will be taking the lead and what the crisis plan is. A recent report from one of the 'big four' accountancy firms revealed that cybercrime was at unprecedented levels with the problem only expected to become even worse, yet a third of the companies it surveyed did not have a plan to respond to a cyberattack. In response to the increasing number of serious incidents affecting clients, Shoosmiths has set up its own crisis management team of specialists on hand 24/7, 365 days a year for clients who sign up to the service. We have also prepared a free download crisis management flowchart to help businesses begin to consider key issues to put a crisis management plan in place whether to deal with a cyber-attack or indeed any other crisis incident. Use the panel above to download a copy of our crisis response flowchart. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Fri, 11 Mar 2016 00:00:00 Z<![CDATA[Alex Bishop ]]><![CDATA[ Businesses face an increasing number of challenges and one of the most severe and potentially damaging is that of cybercrime. Fallout from a cyber-attack can result in both physical as well as reputational damage and the loss of business and customers. FREE DOWNLOAD The first 12 hours matter in a crisis - things happen quickly, they can get out of control. Download your free copy of our Crisis Management flowchart today to identify key dangers, risk areas and opportunities, and to get you on the right track to avoid costly mistakes in the event of any crisis. <!-- .whitepaper --> <!-- .ui-form-note --> Complete the form to start your download. First name Last name Email address Phone number Company If you have any questions, you can review our privacy policy for more information. $(document).ready(function () { if ($('#whitepaperdownloadpanel_WhitepaperPanel').is(":visible")) { $('#WhitepaperDownloadPanel').hide(); } }); $('#DownloadBtn').click(function () { $('#whitepaperdownloadpanel_WhitepaperPanel').show(); $('#WhitepaperDownloadPanel').hide(); }); $('#whitepaperdownloadpanel_WhitepaperFormDownloadButton').click(function () { var pagePosition = $(document).scrollTop(); $('#input_position').val(pagePosition); }); $(document).ready(function () { var pagePosition = ''; $(window).scrollTop(pagePosition); }); $('#whitepaperdownloadpanel_WhitepaperFormDownloadButton').click(function () { $('#whitepaperdownloadpanel_WhitePaperButtonPressed').val('true'); }); <!-- .whitepaper-wrapper --> &quot;The starting point must be that every British company is a target, that every network will be attacked, and that cybercrime is not something that happens to other people... I can tell you that right now GCHQ is monitoring threats against 450 companies.&quot; George Osborne Chancellor <!-- end .quote --> <!-- end .bg-quote --> <!-- end .quote-wrapper --> Chilling words - particularly given how much British businesses now rely on their online presence. It is estimated that internet linked services contributed as much as £294billion to the UK's GDP in 2015 but according to the latest Government Security Breaches Survey (2015), 68% of large organisations and 34% of small organisations surveyed suffered from some form of cyber security breach within the last 12 months (2014-15). It is thought that the overall annual cost of cybercrime to the UK economy could be as much as £34billion with the average cost of the worst security breach for larger organisations being £1.46million - £3.14 million. Last year's very public attack on Talk Talk reminded us of the vulnerabilities of any organisation to a cyberattack. It has been reported that last October's cyberattack cost Talk Talk £60million and the loss of 101,000 customers. Research suggests that UK businesses are dedicating more and more resources to preventing their becoming the latest victim. Statistics suggest 44% of both large and small organisations have increased their spending on information security in the last year. Prevention and defence must always be the fundamental basis to an organisation's approach to cybercrime but with ever changing methods and technologies designed to penetrate an organisation's defences, an increasing focus is being placed on preparing for 'when, not if' a cyberattack strikes. Response team The creation of a response team in preparation for a cyberattack is of vital importance. The first few hours following the discovery of an attack are usually the most crucial and will largely dictate the effect the attack has on an organisation. Any response team created must include a wide breadth of expertise, particularly including IT, PR and legal, to be on hand to advise and deal with the immediate aftermath and discovery of a cyberattack. Everyone within the business should know in advance who will be taking the lead and what the crisis plan is. A recent report from one of the 'big four' accountancy firms revealed that cybercrime was at unprecedented levels with the problem only expected to become even worse, yet a third of the companies it surveyed did not have a plan to respond to a cyberattack. In response to the increasing number of serious incidents affecting clients, Shoosmiths has set up its own crisis management team of specialists on hand 24/7, 365 days a year for clients who sign up to the service. We have also prepared a free download crisis management flowchart to help businesses begin to consider key issues to put a crisis management plan in place whether to deal with a cyber-attack or indeed any other crisis incident. Use the panel above to download a copy of our crisis response flowchart. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{80904A88-BD93-49E7-9F48-1E5BDCA6C6F9}https://www.shoosmiths.co.uk/client-resources/legal-updates/healthcare-sector-requirements-modern-slavery-11044.aspxPharmacists and those in the healthcare sector must be aware of new requirements under the UK Modern Slavery Act 2015 The Modern Slavery Act 2015 introduces a new area of compliance for commercial organisations. The Act is amongst the toughest anti-slavery and human trafficking legislation in the world. Although legal penalties are restricted, interest from patients, consumers, investors, NGOs, pressure groups and brand risk is expected to enforce compliance. Under Section 54 of the Act, organisations supplying goods or services, with a turnover of £36 million or above, will have to publish an annual statement for each financial year setting out what they are doing to ensure there is no modern slavery or human trafficking in any of their supply chains or within their own organisation. This is known as the 'transparency in supply chains' provision. It came into force on 29 October 2015 and is accompanied by statutory guidance. Organisations must comply with the Act if they: supply goods and/or services; and have an annual turnover of £36m or more; and carry on a business or part of a business in any part of the United Kingdom. The Act will affect organisations with a turnover under £36 million to the extent that they supply larger companies who are caught by the provision. Those larger companies will ask the smaller companies to give assurances regarding their supply chains. Smaller companies who are unable to give assurances or who are found to be in breach risk either having their contracts terminated or not being invited to pitch for new ones. Smaller pharmacies or healthcare organisations which supply to larger providers will need to ensure they can answer the questions posed. It is important not to panic. Transitional provisions provide that organisations with a financial year-end from 29 October 2015 up to and including 30 March 2016 will not be required to make a slavery and human trafficking statement for the financial year 2015/16. Organisations with a financial year-end of 31 March 2016 will be required to publish a slavery and human trafficking statement for the financial year 2015/16 within 6 months of their financial year-end. The government has not prescribed the length of or content to be included within the statement. What is required is for an organisation to set out the steps that it has taken during the financial year to ensure slavery and human trafficking is not taking place in any part of its own business or in any of its supply chains. However, an organisation can choose to make a statement to say that it has taken no such steps. Information which could be contained in the statement includes clear and succinct details of: the organisation's structure, its business and supply chains policies relating to slavery and human trafficking (including any links) due diligence processes relating to slavery and human trafficking in its business and supply chains the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place and the steps taken to assess and manage that risk the effectiveness in ensuring that slavery in human trafficking is not taking place in its business or supply chains, measured against key performance indicators training about slavery and human trafficking available to its staff plans for the future (both in terms of due diligence and collaboration with others). The statement must be approved at the highest level of the organisation (i.e. by a director or a partner as appropriate); senior level engagement is required; and a link to the statement must be published in a prominent place on the home page of the organisation. Organisations should consider the following areas when conducting risk assessments: business partnership risk country risk sector risk transaction risk. Continuous assessment, audit and risk review is essential. If an instance of modern slavery is identified, organisations should always consider what approach will result in the safest outcome for the victim(s) whilst remembering the commercial influence the organisation holds over the perpetrator. Termination of supplier relationships should be a last resort which should only be considered after all efforts to work collaboratively to remedy the situation have been exhausted. Healthcare professionals Healthcare professionals can be at the front line when identifying cases of modern slavery and human trafficking. People who have been trafficked or are victims of modern slavery may be under the authorities' radar and may not have contact with other services. It is understood that patients who have been trafficked are frequently diagnosed with a range of mental health issues including post-traumatic stress disorder arising from psychological abuse and physical violence. It is important that health care professionals know what to do if they think a patient might be at risk and how to help them, including referring them to the appropriate authorities. On 1 November 2015 Section 52 of the Act came into force. It requires public authorities (such as county, borough and district councils) to notify the Home Office when they encounter a potential victim of modern slavery. Medical professionals and those in the healthcare sector are not expressly bound by this duty, however they can choose to make a notification if they consider a patient to be at risk. Issues of patient confidentiality arise when making a notification to the authorities, however well-meaning that notification is. Patient consent is key if full details are to be given. However, even if an adult victim does not consent to the notification, the information can still be shared if it is limited to ensure that the victim cannot be identified. The NHS has provided guidance on how to identify and help victims of human trafficking as well as how to refer victims for support going forward. It is recommended that "NHS staff who suspect that a patient may have been trafficked can contact the 24-hour confidential helpline, run by the Salvation Army, for professional advice and support on 0300 303 8151. Staff should follow child protection guidelines when child trafficking is suspected, and speak to their designated lead for child protection: out of hours staff should contact their local Children's Social Services or Police, specifically highlighting their concerns about child trafficking". What next? If your business is involved in the healthcare sector you should assess whether the provisions apply to you and decide how you wish to comply with the provisions. If they do not directly apply, what approach will your business take if you are asked to give assurances by a larger organisation which you supply? If you are a healthcare professional, be alive to modern slavery and human trafficking issues and decide what approach you will take if a patient needs your help. For further information or guidance on any general healthcare matters please contact a member of the Shoosmiths' healthcare team at !Sh-Healthcare@shoosmiths.co.uk. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Fri, 04 Mar 2016 00:00:00 Z<![CDATA[Hayley Saunders ]]><![CDATA[ The Modern Slavery Act 2015 introduces a new area of compliance for commercial organisations. The Act is amongst the toughest anti-slavery and human trafficking legislation in the world. Although legal penalties are restricted, interest from patients, consumers, investors, NGOs, pressure groups and brand risk is expected to enforce compliance. Under Section 54 of the Act, organisations supplying goods or services, with a turnover of £36 million or above, will have to publish an annual statement for each financial year setting out what they are doing to ensure there is no modern slavery or human trafficking in any of their supply chains or within their own organisation. This is known as the 'transparency in supply chains' provision. It came into force on 29 October 2015 and is accompanied by statutory guidance. Organisations must comply with the Act if they: supply goods and/or services; and have an annual turnover of £36m or more; and carry on a business or part of a business in any part of the United Kingdom. The Act will affect organisations with a turnover under £36 million to the extent that they supply larger companies who are caught by the provision. Those larger companies will ask the smaller companies to give assurances regarding their supply chains. Smaller companies who are unable to give assurances or who are found to be in breach risk either having their contracts terminated or not being invited to pitch for new ones. Smaller pharmacies or healthcare organisations which supply to larger providers will need to ensure they can answer the questions posed. It is important not to panic. Transitional provisions provide that organisations with a financial year-end from 29 October 2015 up to and including 30 March 2016 will not be required to make a slavery and human trafficking statement for the financial year 2015/16. Organisations with a financial year-end of 31 March 2016 will be required to publish a slavery and human trafficking statement for the financial year 2015/16 within 6 months of their financial year-end. The government has not prescribed the length of or content to be included within the statement. What is required is for an organisation to set out the steps that it has taken during the financial year to ensure slavery and human trafficking is not taking place in any part of its own business or in any of its supply chains. However, an organisation can choose to make a statement to say that it has taken no such steps. Information which could be contained in the statement includes clear and succinct details of: the organisation's structure, its business and supply chains policies relating to slavery and human trafficking (including any links) due diligence processes relating to slavery and human trafficking in its business and supply chains the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place and the steps taken to assess and manage that risk the effectiveness in ensuring that slavery in human trafficking is not taking place in its business or supply chains, measured against key performance indicators training about slavery and human trafficking available to its staff plans for the future (both in terms of due diligence and collaboration with others). The statement must be approved at the highest level of the organisation (i.e. by a director or a partner as appropriate); senior level engagement is required; and a link to the statement must be published in a prominent place on the home page of the organisation. Organisations should consider the following areas when conducting risk assessments: business partnership risk country risk sector risk transaction risk. Continuous assessment, audit and risk review is essential. If an instance of modern slavery is identified, organisations should always consider what approach will result in the safest outcome for the victim(s) whilst remembering the commercial influence the organisation holds over the perpetrator. Termination of supplier relationships should be a last resort which should only be considered after all efforts to work collaboratively to remedy the situation have been exhausted. Healthcare professionals Healthcare professionals can be at the front line when identifying cases of modern slavery and human trafficking. People who have been trafficked or are victims of modern slavery may be under the authorities' radar and may not have contact with other services. It is understood that patients who have been trafficked are frequently diagnosed with a range of mental health issues including post-traumatic stress disorder arising from psychological abuse and physical violence. It is important that health care professionals know what to do if they think a patient might be at risk and how to help them, including referring them to the appropriate authorities. On 1 November 2015 Section 52 of the Act came into force. It requires public authorities (such as county, borough and district councils) to notify the Home Office when they encounter a potential victim of modern slavery. Medical professionals and those in the healthcare sector are not expressly bound by this duty, however they can choose to make a notification if they consider a patient to be at risk. Issues of patient confidentiality arise when making a notification to the authorities, however well-meaning that notification is. Patient consent is key if full details are to be given. However, even if an adult victim does not consent to the notification, the information can still be shared if it is limited to ensure that the victim cannot be identified. The NHS has provided guidance on how to identify and help victims of human trafficking as well as how to refer victims for support going forward. It is recommended that "NHS staff who suspect that a patient may have been trafficked can contact the 24-hour confidential helpline, run by the Salvation Army, for professional advice and support on 0300 303 8151. Staff should follow child protection guidelines when child trafficking is suspected, and speak to their designated lead for child protection: out of hours staff should contact their local Children's Social Services or Police, specifically highlighting their concerns about child trafficking". What next? If your business is involved in the healthcare sector you should assess whether the provisions apply to you and decide how you wish to comply with the provisions. If they do not directly apply, what approach will your business take if you are asked to give assurances by a larger organisation which you supply? If you are a healthcare professional, be alive to modern slavery and human trafficking issues and decide what approach you will take if a patient needs your help. For further information or guidance on any general healthcare matters please contact a member of the Shoosmiths' healthcare team at !Sh-Healthcare@shoosmiths.co.uk. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{7A288ED0-4D71-41FB-9C90-40BD25EE8ECB}https://www.shoosmiths.co.uk/news/press-releases/shoosmiths-modern-slavery-expert-presents-forum-11010.aspxShoosmiths&#39; Modern Slavery Act expert presents at Northamptonshire Logistics Forum National law firm Shoosmiths regulatory partner Ron Reid will be one of the key note speakers today at the Northamptonshire Logistics Forum. The forum, organised by Northamptonshire Enterprise Partnership, is aimed at understanding transparency in the supply chain including helping local businesses understand their obligations under the Modern Slavery Act. Ron will be presenting on the legal impact the new legislation will have on businesses in the region, and steps business owners can take to ensure that they remain compliant and help in the fight to end slavery. He joins an expert speaker panel including the Anti-Slavery Commissioner Kevin Hyland OBE; Steff Williams, Tactical Advisor at the UK Human Trafficking Centre; Julia Potts from Northamptonshire Police; Liam Fassam, University of Northampton and Charlotte Patrick from the Northampton Enterprise Partnership. Under the Modern Slavery Act 2015 commercial organisations, supplying goods or services, with a turnover of £36 million or above must to publish an annual statement setting out what they are doing to ensure that there is no modern slavery both in their own organization and in any of their supply chains. The turnover calculation includes those organisations that are only carrying out part of their business in the UK, as well as including the turnover of foreign subsidiaries, so supply chains can be complex particularly as services are caught as well as goods. Enforcement is not through prosecution but by way of injunction and risk to brand reputation through interest from press, consumers, stakeholders and investors. Contrary to expectations SMEs are finding that they are affected by the Modern Slavery Transparency Supply Chain provisions because they are required to give assurances to those they supply that they comply with the Modern Slavery Act 2015. With a reputation as the industry expert on the legal implications of MSA, Ron was asked to join the speaker panel to share his thoughts on the steps that businesses should be taking to identify and stamp out modern slavery in their supply chains. Commenting on the new legislation, Ron said: 'Businesses simply can't afford to ignore the reporting obligations of the Modern Slavery Act. As well as putting themselves at risk of injunction, they run the risk of damaging their reputation by failing to meet the increasing consumer expectation that they operate in a corporately responsible manner. All businesses should be thinking about whether they have sufficient practices in place to ensure compliance.' Ron heads the Shoosmiths regulatory team and specialises in business compliance and crisis management issues. He regularly advises and defends clients facing prosecution for corporate crime and breaches of health &amp; safety, environmental, trading standards and other regulatory legislation. He delivers papers to regional, national and international seminars and is a regular commentator in the media on the MSA. For more information on MSA or to download a free compliance checklist visit www.shoosmiths.co.uk Thu, 25 Feb 2016 00:00:00 Z<![CDATA[Hayley Saunders ]]><![CDATA[ National law firm Shoosmiths regulatory partner Ron Reid will be one of the key note speakers today at the Northamptonshire Logistics Forum. The forum, organised by Northamptonshire Enterprise Partnership, is aimed at understanding transparency in the supply chain including helping local businesses understand their obligations under the Modern Slavery Act. Ron will be presenting on the legal impact the new legislation will have on businesses in the region, and steps business owners can take to ensure that they remain compliant and help in the fight to end slavery. He joins an expert speaker panel including the Anti-Slavery Commissioner Kevin Hyland OBE; Steff Williams, Tactical Advisor at the UK Human Trafficking Centre; Julia Potts from Northamptonshire Police; Liam Fassam, University of Northampton and Charlotte Patrick from the Northampton Enterprise Partnership. Under the Modern Slavery Act 2015 commercial organisations, supplying goods or services, with a turnover of £36 million or above must to publish an annual statement setting out what they are doing to ensure that there is no modern slavery both in their own organization and in any of their supply chains. The turnover calculation includes those organisations that are only carrying out part of their business in the UK, as well as including the turnover of foreign subsidiaries, so supply chains can be complex particularly as services are caught as well as goods. Enforcement is not through prosecution but by way of injunction and risk to brand reputation through interest from press, consumers, stakeholders and investors. Contrary to expectations SMEs are finding that they are affected by the Modern Slavery Transparency Supply Chain provisions because they are required to give assurances to those they supply that they comply with the Modern Slavery Act 2015. With a reputation as the industry expert on the legal implications of MSA, Ron was asked to join the speaker panel to share his thoughts on the steps that businesses should be taking to identify and stamp out modern slavery in their supply chains. Commenting on the new legislation, Ron said: 'Businesses simply can't afford to ignore the reporting obligations of the Modern Slavery Act. As well as putting themselves at risk of injunction, they run the risk of damaging their reputation by failing to meet the increasing consumer expectation that they operate in a corporately responsible manner. All businesses should be thinking about whether they have sufficient practices in place to ensure compliance.' Ron heads the Shoosmiths regulatory team and specialises in business compliance and crisis management issues. He regularly advises and defends clients facing prosecution for corporate crime and breaches of health &amp; safety, environmental, trading standards and other regulatory legislation. He delivers papers to regional, national and international seminars and is a regular commentator in the media on the MSA. For more information on MSA or to download a free compliance checklist visit www.shoosmiths.co.uk ]]>{4F864523-9DA1-4ABC-A7C8-5013664E4035}https://www.shoosmiths.co.uk/client-resources/legal-updates/modern-slavery-what-does-it-mean-for-smes-10960.aspxModern Slavery: what does it mean for SMEs? Contrary to expectations SMEs are finding that they are affected by the Modern Slavery Transparency Supply Chain provisions because they are required to give assurances to those they supply that they comply with the Modern Slavery Act 2015. Who is caught? Under the Modern Slavery Act 2015 commercial organisations, supplying goods or services, with a turnover of £36 million or above must to publish an annual statement setting out what they are doing to ensure that there is no modern slavery both in their own organization and in any of their supply chains. The turnover calculation includes those organisations that are only carrying out part of their business in the UK, as well as including the turnover of foreign subsidiaries, so supply chains can be complex particularly as services are caught as well as goods. Transitional provisions provide that organisations with a financial year-end from 29 October up to and including 30 March 2016 will not be required to make a slavery and human trafficking statement for the financial year 2015/16. Organisations with a financial year-end of 31 March 2016 will be required to publish a slavery and human trafficking statement for the financial year 2015/16 within 6 months of their financial year-end. We have previously reported on the provisions. Click here for more information. Why does the Modern Slavery Act 2015 affect SMEs? Enquiries from larger companies SMEs are affected because they form part of the supply chain of larger companies who are caught by the provisions. SMEs are being asked to give assurances to the larger companies that their supply chains are free of modern slavery and human trafficking in order that the larger companies can complete their risk assessment and publish their statement Tenders, new contracts and contract renewals Tender documentation now routinely includes questions about Modern Slavery Act compliance and associated policies irrespective of the turnover of the company being invited to tender. Similarly, when new contracts and contracts are being renewed, anti-slavery clauses are being included as part of Modern Slavery Act 2015 compliance. SMEs must be able to point to relevant policies and procedures if they want to win the tender and/or be awarded the contract and continue doing business with the larger company. They risk losing business if they are unable to do so. The race to the top to drive up standards includes everyone. For advice on Modern Slavery Act compliance, please contact Ron Reid on 03700 86 8471 or Jos Kirkwood on 03700 86 8347 DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Fri, 12 Feb 2016 00:00:00 Z<![CDATA[Hayley Saunders ]]><![CDATA[ Contrary to expectations SMEs are finding that they are affected by the Modern Slavery Transparency Supply Chain provisions because they are required to give assurances to those they supply that they comply with the Modern Slavery Act 2015. Who is caught? Under the Modern Slavery Act 2015 commercial organisations, supplying goods or services, with a turnover of £36 million or above must to publish an annual statement setting out what they are doing to ensure that there is no modern slavery both in their own organization and in any of their supply chains. The turnover calculation includes those organisations that are only carrying out part of their business in the UK, as well as including the turnover of foreign subsidiaries, so supply chains can be complex particularly as services are caught as well as goods. Transitional provisions provide that organisations with a financial year-end from 29 October up to and including 30 March 2016 will not be required to make a slavery and human trafficking statement for the financial year 2015/16. Organisations with a financial year-end of 31 March 2016 will be required to publish a slavery and human trafficking statement for the financial year 2015/16 within 6 months of their financial year-end. We have previously reported on the provisions. Click here for more information. Why does the Modern Slavery Act 2015 affect SMEs? Enquiries from larger companies SMEs are affected because they form part of the supply chain of larger companies who are caught by the provisions. SMEs are being asked to give assurances to the larger companies that their supply chains are free of modern slavery and human trafficking in order that the larger companies can complete their risk assessment and publish their statement Tenders, new contracts and contract renewals Tender documentation now routinely includes questions about Modern Slavery Act compliance and associated policies irrespective of the turnover of the company being invited to tender. Similarly, when new contracts and contracts are being renewed, anti-slavery clauses are being included as part of Modern Slavery Act 2015 compliance. SMEs must be able to point to relevant policies and procedures if they want to win the tender and/or be awarded the contract and continue doing business with the larger company. They risk losing business if they are unable to do so. The race to the top to drive up standards includes everyone. For advice on Modern Slavery Act compliance, please contact Ron Reid on 03700 86 8471 or Jos Kirkwood on 03700 86 8347 DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{45938356-11BE-4E3A-9875-D8C28A0709E2}https://www.shoosmiths.co.uk/client-resources/legal-updates/business-regulation-the-power-of-brand-10967.aspxBusiness regulation - the power of the brand There is a growing trend for naming and shaming rather than criminal penalties. Is the future of compliance self-regulation, for fear of reputational damage? The draft regulations on gender pay reporting requirements for large organisations are set to continue the trend for self-regulated compliance rather than imposition of criminal penalties. The government has indicated that it will publicise the identity of organisations who haven't complied with the regulations. For more information about how to comply click here. The approach continues the trend of a willingness to name and shame non-compliant organisations. For example, a large retail brand attracted press attention for not paying the minimum wage to its employees, whilst chains in the restaurant industry were criticised for failing to pass tips left by customers to employees. The implementation of the Modern Slavery Act Transparency in Supply Chains obligation continues the trend. The government indicated that it would name and shame those who failed to comply - a theme taken up by Kevin Hyland OBE, the new Anti-Slavery Commissioner. The consequence of a culture where businesses are named and shamed for perceived non-compliance by consumers, stakeholders and investors is a real risk to brand. There is a fine line between compliance because it is the right thing to do and compliance to gain perceived commercial advantage. The race to the top to drive up standards should allow people to adopt a culture where compliance goes hand in hand with corporate responsibility. Ultimately, the risk to brand will be the driving force. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Fri, 12 Feb 2016 00:00:00 Z<![CDATA[Hayley Saunders Paula Rome ]]><![CDATA[ There is a growing trend for naming and shaming rather than criminal penalties. Is the future of compliance self-regulation, for fear of reputational damage? The draft regulations on gender pay reporting requirements for large organisations are set to continue the trend for self-regulated compliance rather than imposition of criminal penalties. The government has indicated that it will publicise the identity of organisations who haven't complied with the regulations. For more information about how to comply click here. The approach continues the trend of a willingness to name and shame non-compliant organisations. For example, a large retail brand attracted press attention for not paying the minimum wage to its employees, whilst chains in the restaurant industry were criticised for failing to pass tips left by customers to employees. The implementation of the Modern Slavery Act Transparency in Supply Chains obligation continues the trend. The government indicated that it would name and shame those who failed to comply - a theme taken up by Kevin Hyland OBE, the new Anti-Slavery Commissioner. The consequence of a culture where businesses are named and shamed for perceived non-compliance by consumers, stakeholders and investors is a real risk to brand. There is a fine line between compliance because it is the right thing to do and compliance to gain perceived commercial advantage. The race to the top to drive up standards should allow people to adopt a culture where compliance goes hand in hand with corporate responsibility. Ultimately, the risk to brand will be the driving force. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{16CBA830-6574-4092-8F31-C20F952C1985}https://www.shoosmiths.co.uk/news/press-releases/manufacturers-urged-to-invest-in-health-and-safety-10904.aspxManufacturers urged to invest in Health &amp; Safety as fines are ratcheted up Businesses are being urged to restore investment in their Health & Safety (H&S) programmes as a new regime of far larger fines for non-compliance is introduced. FREE DOWNLOAD Download our free Board briefing which covers the topics of penalties for health and safety offences, corporate manslaughter and food safety and hygiene offences. <!-- .whitepaper --> <!-- .ui-form-note --> Complete the form to start your download. First name Last name Email address Phone number Company If you have any questions, you can review our privacy policy for more information. $(document).ready(function () { if ($('#whitepaperdownloadpanel_WhitepaperPanel').is(":visible")) { $('#WhitepaperDownloadPanel').hide(); } }); $('#DownloadBtn').click(function () { $('#whitepaperdownloadpanel_WhitepaperPanel').show(); $('#WhitepaperDownloadPanel').hide(); }); $('#whitepaperdownloadpanel_WhitepaperFormDownloadButton').click(function () { var pagePosition = $(document).scrollTop(); $('#input_position').val(pagePosition); }); $(document).ready(function () { var pagePosition = ''; $(window).scrollTop(pagePosition); }); $('#whitepaperdownloadpanel_WhitepaperFormDownloadButton').click(function () { $('#whitepaperdownloadpanel_WhitePaperButtonPressed').val('true'); }); <!-- .whitepaper-wrapper --> Businesses are being urged to restore investment in their Health &amp; Safety (H&amp;S) programmes as a new regime of far larger fines for non-compliance is introduced. Businesses which may have slashed their H&amp;S training and prevention budgets as part of previous cost-cutting initiatives will now find themselves exposed to penalties five or even ten times higher than under the previous regime. Safety compliance experts at national law firm Shoosmiths believe that few firms will be aware of the changes which came into effect on 1 Feb 2016. Fines will be determined by a combination of harm, culpability and company turnover. Fining a company on the basis of its turnover, rather than its profitability, could have a disproportionate impact on companies whose profit margins are already under incredible pressure. Ron Reid, a partner at Shoosmiths and head of their regulatory and compliance team, commented: 'In the last few weeks before 1 Feb, there was the decidedly unusual spectacle of defence teams pushing to have their H&amp;S cases heard early, before the new sentencing structure came in. There will be plenty more businesses though who I think are blissfully unaware of quite how big an impact this new regime could have on any of them who fall foul of current regulations.' 'The government's intention to clamp down on indiscretions in this space, pursuing both organisations and individuals, is laudable. However, aligning the fines to company turnover - as the new guidelines do - seems like a rather blunt approach to take to the issue. After all, we're talking about turnover here, not profitability.' 'A medium-sized company, according to the guidelines, is defined as having turnover between £10m and £50m. Such an organisation may operate in a very low margin sector but could nevertheless be subject to a fine for corporate manslaughter of between £3m and £7.5m (up from a starting point of £0.5m under the previous guidelines). That's a game-changing amount.' 'Even the more frequent, routine safety breaches which may not have life-changing effects will become more costly affairs. Such a breach, considered to be in one of the lower harm categories, for the same medium-sized organisation will carry a fine starting at £100k. Under the previous guidelines, such an amount was what you expected to be fined for a breach which resulted in death.' 'We should never lose sight of the human cost in many of these most serious cases. Plus, the intention of these harsher penalties is to send an unequivocal message to management and stakeholders that such failures will not be tolerated. Someone has to pay. Nevertheless, the impact of a fine, especially for some of the lesser offences, could, in some cases, be seen as disproportionate.' For those organisations that do find themselves in court regarding H&amp;S failings, there is the sobering realisation that prosecutions in this space enjoyed a 96% success rate last year. The majority of the legal argument therefore will not focus on guilt and liability - but on placing the offence into the appropriate categories for both harm and culpability. The difference in the size of the fine from one category to the next could be significant. Senior individuals should be aware too. Between 1975 and 2009, just eleven people were imprisoned or given suspended sentences relating to H&amp;S breaches. Since 2009, when the legislation was last tweaked, 157 people have been sentenced, including 26 alone in the six month period up until October 2015. Reid continued: 'There is no doubt that the government is doing a fine job of making it perfectly clear that H&amp;S is not something to be trifled with. The new regime represents a seismic change in terms of the financial penalties - and there is no accounting provision for being able to put funds aside for the possible payment of future fines.' 'The best way to approach this topic is simply by reversing the recent trend of diminished investment in H&amp;S. Any organisation who thought that paying the occasional fine was a better option than investing in prevention will need an urgent rethink.'Mon, 01 Feb 2016 00:00:00 Z<![CDATA[Hayley Saunders ]]><![CDATA[ Businesses are being urged to restore investment in their Health & Safety (H&S) programmes as a new regime of far larger fines for non-compliance is introduced. FREE DOWNLOAD Download our free Board briefing which covers the topics of penalties for health and safety offences, corporate manslaughter and food safety and hygiene offences. <!-- .whitepaper --> <!-- .ui-form-note --> Complete the form to start your download. First name Last name Email address Phone number Company If you have any questions, you can review our privacy policy for more information. $(document).ready(function () { if ($('#whitepaperdownloadpanel_WhitepaperPanel').is(":visible")) { $('#WhitepaperDownloadPanel').hide(); } }); $('#DownloadBtn').click(function () { $('#whitepaperdownloadpanel_WhitepaperPanel').show(); $('#WhitepaperDownloadPanel').hide(); }); $('#whitepaperdownloadpanel_WhitepaperFormDownloadButton').click(function () { var pagePosition = $(document).scrollTop(); $('#input_position').val(pagePosition); }); $(document).ready(function () { var pagePosition = ''; $(window).scrollTop(pagePosition); }); $('#whitepaperdownloadpanel_WhitepaperFormDownloadButton').click(function () { $('#whitepaperdownloadpanel_WhitePaperButtonPressed').val('true'); }); <!-- .whitepaper-wrapper --> Businesses are being urged to restore investment in their Health &amp; Safety (H&amp;S) programmes as a new regime of far larger fines for non-compliance is introduced. Businesses which may have slashed their H&amp;S training and prevention budgets as part of previous cost-cutting initiatives will now find themselves exposed to penalties five or even ten times higher than under the previous regime. Safety compliance experts at national law firm Shoosmiths believe that few firms will be aware of the changes which came into effect on 1 Feb 2016. Fines will be determined by a combination of harm, culpability and company turnover. Fining a company on the basis of its turnover, rather than its profitability, could have a disproportionate impact on companies whose profit margins are already under incredible pressure. Ron Reid, a partner at Shoosmiths and head of their regulatory and compliance team, commented: 'In the last few weeks before 1 Feb, there was the decidedly unusual spectacle of defence teams pushing to have their H&amp;S cases heard early, before the new sentencing structure came in. There will be plenty more businesses though who I think are blissfully unaware of quite how big an impact this new regime could have on any of them who fall foul of current regulations.' 'The government's intention to clamp down on indiscretions in this space, pursuing both organisations and individuals, is laudable. However, aligning the fines to company turnover - as the new guidelines do - seems like a rather blunt approach to take to the issue. After all, we're talking about turnover here, not profitability.' 'A medium-sized company, according to the guidelines, is defined as having turnover between £10m and £50m. Such an organisation may operate in a very low margin sector but could nevertheless be subject to a fine for corporate manslaughter of between £3m and £7.5m (up from a starting point of £0.5m under the previous guidelines). That's a game-changing amount.' 'Even the more frequent, routine safety breaches which may not have life-changing effects will become more costly affairs. Such a breach, considered to be in one of the lower harm categories, for the same medium-sized organisation will carry a fine starting at £100k. Under the previous guidelines, such an amount was what you expected to be fined for a breach which resulted in death.' 'We should never lose sight of the human cost in many of these most serious cases. Plus, the intention of these harsher penalties is to send an unequivocal message to management and stakeholders that such failures will not be tolerated. Someone has to pay. Nevertheless, the impact of a fine, especially for some of the lesser offences, could, in some cases, be seen as disproportionate.' For those organisations that do find themselves in court regarding H&amp;S failings, there is the sobering realisation that prosecutions in this space enjoyed a 96% success rate last year. The majority of the legal argument therefore will not focus on guilt and liability - but on placing the offence into the appropriate categories for both harm and culpability. The difference in the size of the fine from one category to the next could be significant. Senior individuals should be aware too. Between 1975 and 2009, just eleven people were imprisoned or given suspended sentences relating to H&amp;S breaches. Since 2009, when the legislation was last tweaked, 157 people have been sentenced, including 26 alone in the six month period up until October 2015. Reid continued: 'There is no doubt that the government is doing a fine job of making it perfectly clear that H&amp;S is not something to be trifled with. The new regime represents a seismic change in terms of the financial penalties - and there is no accounting provision for being able to put funds aside for the possible payment of future fines.' 'The best way to approach this topic is simply by reversing the recent trend of diminished investment in H&amp;S. Any organisation who thought that paying the occasional fine was a better option than investing in prevention will need an urgent rethink.']]>{BAF6100F-6D87-46F1-B260-26464E7E414C}https://www.shoosmiths.co.uk/client-resources/legal-updates/safety-non-compliance-offences-10869.aspxSafety Non-Compliance Offences - Is your provision for fines sufficient? The linking of fines to turnover is one of the most seismic changes to hit offenders in a generation. FREE DOWNLOAD Download our free Board briefing which covers the topics of penalties for health and safety offences, corporate manslaughter and food safety and hygiene offences. <!-- .whitepaper --> <!-- .ui-form-note --> Complete the form to start your download. First name Last name Email address Phone number Company If you have any questions, you can review our privacy policy for more information. $(document).ready(function () { if ($('#whitepaperdownloadpanel_WhitepaperPanel').is(":visible")) { $('#WhitepaperDownloadPanel').hide(); } }); $('#DownloadBtn').click(function () { $('#whitepaperdownloadpanel_WhitepaperPanel').show(); $('#WhitepaperDownloadPanel').hide(); }); $('#whitepaperdownloadpanel_WhitepaperFormDownloadButton').click(function () { var pagePosition = $(document).scrollTop(); $('#input_position').val(pagePosition); }); $(document).ready(function () { var pagePosition = ''; $(window).scrollTop(pagePosition); }); $('#whitepaperdownloadpanel_WhitepaperFormDownloadButton').click(function () { $('#whitepaperdownloadpanel_WhitePaperButtonPressed').val('true'); }); <!-- .whitepaper-wrapper --> The new Sentencing Council guidelines for Health and Safety offences, Corporate Manslaughter and Food Safety and Hygiene offences, which come into effect on 1 February 2016, will mean that Compliance Officers and Boards of Management will need to urgently review the provision they make for any such offences and to reconsider where such matters sit within their overall corporate risk. We have previously drawn attention to the Sentencing Guideline Provisions. Any organisation which has not taken these changes into account should do so without further delay. In particular, anyone who is awaiting a decision as to whether a prosecution may take place should make alteration to their provision depending upon their turnover. In general terms, penalties will be considerably higher than they have been in the past. For example, a health and safety offence which resulted in death under the previous guidelines, issued in 2010, recommended a starting point for a fine at £100,000. Now a medium size organisation having a turnover of between £10 million and £50 million could see the starting point as high as £1.6 million depending on the level of culpability. For Corporate Manslaughter offences, the previous guidelines indicated a fine starting point of £500,000. Now a medium size organisation would see a starting point of £3 million with a possibility of fines up to £7.5 million. A large organisation with a turnover of more the £50 million faces potential fines of up to £20 million. We have prepared a Board briefing setting out these changes. In order to obtain your copy click the download button in the panel above. We have already delivered a number of online and face to face Health &amp; Safety training sessions to help board members ensure that their businesses are compliant. For more information please contact Ron Reid. Organisations failing to take these changes into account and failing to put adequate resources in to managing the risks of non-compliance in these areas do so at their peril. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Fri, 22 Jan 2016 00:00:00 Z<![CDATA[Hayley Saunders ]]><![CDATA[ The linking of fines to turnover is one of the most seismic changes to hit offenders in a generation. FREE DOWNLOAD Download our free Board briefing which covers the topics of penalties for health and safety offences, corporate manslaughter and food safety and hygiene offences. <!-- .whitepaper --> <!-- .ui-form-note --> Complete the form to start your download. First name Last name Email address Phone number Company If you have any questions, you can review our privacy policy for more information. $(document).ready(function () { if ($('#whitepaperdownloadpanel_WhitepaperPanel').is(":visible")) { $('#WhitepaperDownloadPanel').hide(); } }); $('#DownloadBtn').click(function () { $('#whitepaperdownloadpanel_WhitepaperPanel').show(); $('#WhitepaperDownloadPanel').hide(); }); $('#whitepaperdownloadpanel_WhitepaperFormDownloadButton').click(function () { var pagePosition = $(document).scrollTop(); $('#input_position').val(pagePosition); }); $(document).ready(function () { var pagePosition = ''; $(window).scrollTop(pagePosition); }); $('#whitepaperdownloadpanel_WhitepaperFormDownloadButton').click(function () { $('#whitepaperdownloadpanel_WhitePaperButtonPressed').val('true'); }); <!-- .whitepaper-wrapper --> The new Sentencing Council guidelines for Health and Safety offences, Corporate Manslaughter and Food Safety and Hygiene offences, which come into effect on 1 February 2016, will mean that Compliance Officers and Boards of Management will need to urgently review the provision they make for any such offences and to reconsider where such matters sit within their overall corporate risk. We have previously drawn attention to the Sentencing Guideline Provisions. Any organisation which has not taken these changes into account should do so without further delay. In particular, anyone who is awaiting a decision as to whether a prosecution may take place should make alteration to their provision depending upon their turnover. In general terms, penalties will be considerably higher than they have been in the past. For example, a health and safety offence which resulted in death under the previous guidelines, issued in 2010, recommended a starting point for a fine at £100,000. Now a medium size organisation having a turnover of between £10 million and £50 million could see the starting point as high as £1.6 million depending on the level of culpability. For Corporate Manslaughter offences, the previous guidelines indicated a fine starting point of £500,000. Now a medium size organisation would see a starting point of £3 million with a possibility of fines up to £7.5 million. A large organisation with a turnover of more the £50 million faces potential fines of up to £20 million. We have prepared a Board briefing setting out these changes. In order to obtain your copy click the download button in the panel above. We have already delivered a number of online and face to face Health &amp; Safety training sessions to help board members ensure that their businesses are compliant. For more information please contact Ron Reid. Organisations failing to take these changes into account and failing to put adequate resources in to managing the risks of non-compliance in these areas do so at their peril. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{BBF2C4BF-538A-4AB0-B6E6-4DE1FAAA9B3E}https://www.shoosmiths.co.uk/news/press-releases/shoosmiths-shortlisted-for-compliance-award-10727.aspxShoosmiths shortlisted for compliance award National law firm Shoosmiths has been shortlisted for Best Regulatory Law Firm at the 2016 Women in Compliance Awards. Female legal advisers make a massive contribution to the success of the Shoosmiths team and include Manchester-based partner, Andrea James and Birmingham-based senior associate Hayley Saunders. The shortlisting recognises another excellent year for Shoosmiths compliance team marked by continued growth, investment, awards success and a number of new instructions. The team works for a number of high profile clients and this year successfully defended an operations manager in a high profile health and safety case - one of the earliest prosecutions under the Corporate Manslaughter and Corporate Homicide Act 2007, which resulted in the UK's highest corporate manslaughter fine for a UK business. The shortlisting also recognised the team's expertise in advising a range of healthcare sector clients in regulatory and compliance matters, for example recently advising an ambulance service in relation to Care Quality Commission enforcement action, which ultimately resulted in all sanctions being lifted. Senior associate, Hayley Saunders, commented: 'We are pleased to have been shortlisted for this award which recognises not only our ability to act in litigated cases, but also our commitment to providing innovative solutions to help identify and manage risk before it becomes an issue for our clients. It is great that our team has been recognised for their talent and expertise.' From competition breaches to data theft, fraud and corruption to environmental disasters, and product recalls to fatal accidents and professional discipline investigations, Shoosmiths compliance team provides 24/7 legal support. The award criteria stipulate that entrants must demonstrate that their compliance team is either led by a woman or has a diverse make-up with female team members being integral to its function and success. Winners will be revealed at this year's awards ceremony, which will take place on 17 March 2016 at St Paul's hotel in London.Tue, 01 Dec 2015 00:00:00 Z<![CDATA[Hayley Saunders ]]><![CDATA[ National law firm Shoosmiths has been shortlisted for Best Regulatory Law Firm at the 2016 Women in Compliance Awards. Female legal advisers make a massive contribution to the success of the Shoosmiths team and include Manchester-based partner, Andrea James and Birmingham-based senior associate Hayley Saunders. The shortlisting recognises another excellent year for Shoosmiths compliance team marked by continued growth, investment, awards success and a number of new instructions. The team works for a number of high profile clients and this year successfully defended an operations manager in a high profile health and safety case - one of the earliest prosecutions under the Corporate Manslaughter and Corporate Homicide Act 2007, which resulted in the UK's highest corporate manslaughter fine for a UK business. The shortlisting also recognised the team's expertise in advising a range of healthcare sector clients in regulatory and compliance matters, for example recently advising an ambulance service in relation to Care Quality Commission enforcement action, which ultimately resulted in all sanctions being lifted. Senior associate, Hayley Saunders, commented: 'We are pleased to have been shortlisted for this award which recognises not only our ability to act in litigated cases, but also our commitment to providing innovative solutions to help identify and manage risk before it becomes an issue for our clients. It is great that our team has been recognised for their talent and expertise.' From competition breaches to data theft, fraud and corruption to environmental disasters, and product recalls to fatal accidents and professional discipline investigations, Shoosmiths compliance team provides 24/7 legal support. The award criteria stipulate that entrants must demonstrate that their compliance team is either led by a woman or has a diverse make-up with female team members being integral to its function and success. Winners will be revealed at this year's awards ceremony, which will take place on 17 March 2016 at St Paul's hotel in London.]]>{D6056F25-DBDC-45BF-A8FC-0EB004382658}https://www.shoosmiths.co.uk/client-resources/legal-updates/proposed-changes-to-make-fundraising-easier-10688.aspxProposed changes to make fundraising easier Companies often find that certain types of fundraising (for example running a raffle or sweepstake) for charity can be difficult and onerous due to gambling regulations. Companies find that they need to obtain a Gambling Commission operating licence, register with a local authority or 'squeeze' the lottery into an exemption under the Gambling Act. The Government has proposed draft legislation which will relax the rules surrounding the holding of small lotteries for fundraising purposes. If approved, the Legislative Reform (Exempt Lotteries) Order 2016 will come into force on 6 April next year. What is a lottery? A raffle or prize draw will be classed as a lottery if it meets the following conditions: payment is required to participate; one or more prizes are awarded; and those prizes are awarded by chance. Lotteries, which are a form of gambling, cannot be run for private or commercial gain. It is a criminal offence to run a lottery unless you have a lottery operating licence (or register with a local authority for certain types of lottery) or the lottery falls into one of the exemptions under the regulations. The current position v the proposed position - Exempt Lotteries Below are some examples of types of lotteries that do not require a licence or registration, the current common difficulties which mean they are unsuitable for fundraising and how the position will change for the better: Type of Lottery Current position/ Common issues What will change? Incidental non-commercial lotteries i.e. a lottery held at a school fete or dinner dance must be at a non-commercial event only i.e. where none of the proceeds from the event (including entrance fees or sales of food and drink) are used for private gain. all tickets must be sold at the location during the event the result must be made public while the event takes place. incidental non-commercial lotteries will be able to be held at commercial events. This means that organisers of a non-charitable event will be able to run a lottery, provided that all proceeds (minus a maximum of £100 for expenses) from the lottery itself go to good causes. the results will no longer need to be announced during the event. note: there will still be a maximum prize limit of £500. Private society lotteries tickets can only be sold to other members of that society and to people on the premises used for the administration of the society. may only be promoted and raise proceeds for the purposes for which the society is conducted. private societies will be free to run lotteries to fundraise for any good cause, not just for the benefit of the society itself. Work lotteries tickets can only be sold to other people who work on the same single set of premises. must not be run for profit and so is unsuitable for fundraising. work lotteries will be permitted to make a profit provided that this is for the benefit of a good cause. Residents' lotteries the promoter of the lottery must reside in the premises and tickets can only be sold to other residents of the same single set of premises. must not be run for profit and so is unsuitable for fundraising. residents' lotteries will be permitted to make a profit provided that this is for the benefit of a good cause. organisers of lotteries will have less prescribed information to display on each ticket. If you require more information on the proposed changes or wish to run a lottery and require legal advice please contact the team who will be happy to assist. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Tue, 24 Nov 2015 00:00:00 Z<![CDATA[Philip Ryan Hayley Saunders ]]><![CDATA[ Companies often find that certain types of fundraising (for example running a raffle or sweepstake) for charity can be difficult and onerous due to gambling regulations. Companies find that they need to obtain a Gambling Commission operating licence, register with a local authority or 'squeeze' the lottery into an exemption under the Gambling Act. The Government has proposed draft legislation which will relax the rules surrounding the holding of small lotteries for fundraising purposes. If approved, the Legislative Reform (Exempt Lotteries) Order 2016 will come into force on 6 April next year. What is a lottery? A raffle or prize draw will be classed as a lottery if it meets the following conditions: payment is required to participate; one or more prizes are awarded; and those prizes are awarded by chance. Lotteries, which are a form of gambling, cannot be run for private or commercial gain. It is a criminal offence to run a lottery unless you have a lottery operating licence (or register with a local authority for certain types of lottery) or the lottery falls into one of the exemptions under the regulations. The current position v the proposed position - Exempt Lotteries Below are some examples of types of lotteries that do not require a licence or registration, the current common difficulties which mean they are unsuitable for fundraising and how the position will change for the better: Type of Lottery Current position/ Common issues What will change? Incidental non-commercial lotteries i.e. a lottery held at a school fete or dinner dance must be at a non-commercial event only i.e. where none of the proceeds from the event (including entrance fees or sales of food and drink) are used for private gain. all tickets must be sold at the location during the event the result must be made public while the event takes place. incidental non-commercial lotteries will be able to be held at commercial events. This means that organisers of a non-charitable event will be able to run a lottery, provided that all proceeds (minus a maximum of £100 for expenses) from the lottery itself go to good causes. the results will no longer need to be announced during the event. note: there will still be a maximum prize limit of £500. Private society lotteries tickets can only be sold to other members of that society and to people on the premises used for the administration of the society. may only be promoted and raise proceeds for the purposes for which the society is conducted. private societies will be free to run lotteries to fundraise for any good cause, not just for the benefit of the society itself. Work lotteries tickets can only be sold to other people who work on the same single set of premises. must not be run for profit and so is unsuitable for fundraising. work lotteries will be permitted to make a profit provided that this is for the benefit of a good cause. Residents' lotteries the promoter of the lottery must reside in the premises and tickets can only be sold to other residents of the same single set of premises. must not be run for profit and so is unsuitable for fundraising. residents' lotteries will be permitted to make a profit provided that this is for the benefit of a good cause. organisers of lotteries will have less prescribed information to display on each ticket. If you require more information on the proposed changes or wish to run a lottery and require legal advice please contact the team who will be happy to assist. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{EB4C8B7A-20FC-40A7-832F-630623671C96}https://www.shoosmiths.co.uk/client-resources/legal-updates/new-sentencing-guidelines-penalties-breaching-health-safety-laws-10620.aspxNew sentencing guidelines: tougher penalties for companies breaching health and safety laws On 3 November 2015, the Sentencing Council (the Council) published the guidelines on Health and Safety, Corporate Manslaughter and Food Safety and Hygiene offences. The long awaited Guidelines were published alongside the Response to Consultation and come into force on 1 February 2016. The guidelines The Guidelines apply to companies or individuals (aged 18 and older) who are sentenced on or after 1 February 2016, regardless of the date of the offence. The Guidelines set out a number of steps that the sentencing court will need to go through to establish the appropriate fine. Firstly, the court will need to determine the category of offence. This is based on two stages, the level of culpability and the level of harm. Secondly, starting points (which apply to all offenders, whether they have pleaded guilty or been convicted after trial) define the position within a category range from which to start calculating the provisional sentence. The court is required to focus on the organisation's annual turnover or equivalent to reach a starting point for a fine. The court then consider further features of the offence or the offender that warrant adjustment of the sentence within the range, including aggravating and mitigating factors. Credit for a guilty plea is taken into consideration only after the appropriate sentence has been identified. Consultation Responses to the consultation included whether linking fines to turnover was 'too rigid and overly simplistic' and would lead to firms of varying sizes receiving grossly different fines for similar incidents. The Council has, however, adopted this approach and stated: 'We accept that using turnover to determine the size of a business is something of a blunt instrument but we believe the overall sentencing process in the proposed guideline gives sentencers the flexibility they need to ensure the interests of justice are served.' Very large organisations It was proposed that a proportionate multiplier be included in the Guidelines to clarify a suitable calculation when imposing fines for very large organisations (i.e. those with turnovers greater than £50 million). The Council decided not to include such a feature within the Guidelines as to do so could, due to the complexity of sentencing very large organisations, hinder sentencers and would conflict with the guidance to 'consider the financial circumstances of the organisation in the round.' This also maintains consistency with the approach in the environmental guidelines. Instead, the Guidelines state: 'Where an offending organisation's turnover or equivalent very greatly exceeds the threshold for large organisations, it may be necessary to move outside the suggested range to achieve a proportionate sentence.' How tough are the new proposed fines likely to be? Under the Guidelines a large organisation that commits an offence with the greatest exposure to harm (for example, a fatal accident) and with high culpability will see a sentencing range of £4.8 million - £20 million with a starting point of £7.5 million. Large food operators that commit a food safety offence with a serious adverse effect on human health with high culpability will see a sentencing range of £500,000 - £3 million. Individuals that commit serious offences with high culpability can expect custodial sentences or serious fines where profit was a motivating factor in the commission of the offence. Summary Companies need to start taking this very seriously. The message in the Guidelines is that: 'the fine must be sufficiently substantial to have a real economic impact which will bring home to both management and shareholders the need to comply with health and safety legislation.' If you wish to understand the impact of the Guidelines on your business or require legal advice please contact the team who will be happy to assist. For a link back to our previous article, click here. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Wed, 04 Nov 2015 00:00:00 Z<![CDATA[Philip Ryan Hayley Saunders ]]><![CDATA[ On 3 November 2015, the Sentencing Council (the Council) published the guidelines on Health and Safety, Corporate Manslaughter and Food Safety and Hygiene offences. The long awaited Guidelines were published alongside the Response to Consultation and come into force on 1 February 2016. The guidelines The Guidelines apply to companies or individuals (aged 18 and older) who are sentenced on or after 1 February 2016, regardless of the date of the offence. The Guidelines set out a number of steps that the sentencing court will need to go through to establish the appropriate fine. Firstly, the court will need to determine the category of offence. This is based on two stages, the level of culpability and the level of harm. Secondly, starting points (which apply to all offenders, whether they have pleaded guilty or been convicted after trial) define the position within a category range from which to start calculating the provisional sentence. The court is required to focus on the organisation's annual turnover or equivalent to reach a starting point for a fine. The court then consider further features of the offence or the offender that warrant adjustment of the sentence within the range, including aggravating and mitigating factors. Credit for a guilty plea is taken into consideration only after the appropriate sentence has been identified. Consultation Responses to the consultation included whether linking fines to turnover was 'too rigid and overly simplistic' and would lead to firms of varying sizes receiving grossly different fines for similar incidents. The Council has, however, adopted this approach and stated: 'We accept that using turnover to determine the size of a business is something of a blunt instrument but we believe the overall sentencing process in the proposed guideline gives sentencers the flexibility they need to ensure the interests of justice are served.' Very large organisations It was proposed that a proportionate multiplier be included in the Guidelines to clarify a suitable calculation when imposing fines for very large organisations (i.e. those with turnovers greater than £50 million). The Council decided not to include such a feature within the Guidelines as to do so could, due to the complexity of sentencing very large organisations, hinder sentencers and would conflict with the guidance to 'consider the financial circumstances of the organisation in the round.' This also maintains consistency with the approach in the environmental guidelines. Instead, the Guidelines state: 'Where an offending organisation's turnover or equivalent very greatly exceeds the threshold for large organisations, it may be necessary to move outside the suggested range to achieve a proportionate sentence.' How tough are the new proposed fines likely to be? Under the Guidelines a large organisation that commits an offence with the greatest exposure to harm (for example, a fatal accident) and with high culpability will see a sentencing range of £4.8 million - £20 million with a starting point of £7.5 million. Large food operators that commit a food safety offence with a serious adverse effect on human health with high culpability will see a sentencing range of £500,000 - £3 million. Individuals that commit serious offences with high culpability can expect custodial sentences or serious fines where profit was a motivating factor in the commission of the offence. Summary Companies need to start taking this very seriously. The message in the Guidelines is that: 'the fine must be sufficiently substantial to have a real economic impact which will bring home to both management and shareholders the need to comply with health and safety legislation.' If you wish to understand the impact of the Guidelines on your business or require legal advice please contact the team who will be happy to assist. For a link back to our previous article, click here. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{1DE6024C-9375-4756-846B-63472EB33042}https://www.shoosmiths.co.uk/client-resources/legal-updates/statutory-guidance-published-modern-slavery-10613.aspxStatutory guidance published: Modern Slavery - Transparency in Supply Chains provision The transparency in supply chains provisions came into force on 29 October 2015. The long awaited statutory guidance has been published. This briefing sets out the key points for business. Introduction The objective of the Modern Slavery Act 2015 is to prevent modern slavery entering the supply chain and organisations as well as preventing more people becoming victims. The stated aim of the government is to 'require businesses to be transparent about what they are doing and... increase competition to drive up standards'. The statutory guidance provides information and case studies about how organisations can comply with the transparency in supply chain provisions ('the provisions'). Supply chain has its 'every day' meaning but an annex to the guidance refers to all supply chains and contractual relationships. The provisions are designed to increase transparency by requiring organisations to set out the steps they are taking to tackle modern slavery. We have previously reported on the key legal obligations set out in the provisions. It is anticipated that the first statements could show what businesses are doing to begin to act on the issue of modern slavery in their supply chain as well as identifying what investigation or collaboration needs to happen with others to cause change. The Modern Slavery Act 2015 The provisions seek to create a 'level playing field' between those who are caught by the requirements who already act responsibly and those who need to change policies to ensure they do so. The hope is that businesses will go beyond their legal duty and do more to tackle modern slavery in their supply chains because it is 'the right thing to do'. The underlying message is that businesses who fail to comply with the provisions risk damage to their reputation and their brand and suggest that consumers, investors and NGOs apply pressure where they perceive that organisations haven't done enough to comply. Who is required to comply? A commercial organisation with a turnover of £36m or more which carries on business (or part of a business) in the UK and supplies goods or services is required to produce a slavery and human trafficking statement for each financial year of the organisation. A common sense approach is to be adopted. Even if the organisation carries out charitable, public functions or educational aims, the organisation will be required to comply with the provisions if it carries out commercial activities and meets the turnover threshold. This means that certain public sector organisations will be caught if they carry out commercial activities. Franchises Franchisers are required to make a statement if the turnover of the franchiser meets the £36m threshold. When making the statement, the franchiser may choose to include activities of franchisees in order to protect the franchiser's brand. Such an approach will show the franchiser takes the issue of modern slavery seriously. If the franchisee meets the turnover threshold in its own right, the franchisee is required to make its own statement. Parents and subsidiaries If a parent or a subsidiary (irrespective of location) meets the requirements of the provisions, they are required to make a statement in their own right even if another company in the group does so. The definition of a subsidiary has the meaning given by section 1162 of the Companies Act 2006 The guidance states that it is for individual parent organisations to determine whether or not a subsidiary forms part of its supply chain. The provisions are referred to in the guidance as 'tests in the Act'. When considering whether or not the provisions apply to parents or subsidiaries, organisations should use the provisions as tests. If all the stages of the test apply, the organisation (or part thereof) will be caught and required to comply. It is highly recommended for parent companies to consider including the activities of foreign subsidiaries in their statement especially where that foreign subsidiary is based in high risk location or sector. Penalties The civil penalties of an injunction or order for specific performance of a statutory duty remain but given the propensity for naming and shaming (most recently reported in the press regarding the non-payment of the national minimum wage) it is likely that organisations can expect the Anti-Slavery Commissioner to follow suit. The provisions are designed to create a 'race to the top' through competition to 'drive up standards'. Transitional provisions are in place giving time for organisations to formulate and implement strategies rather than adopting a hasty approach. We are already seeing large clients experiencing pressure from those they supply to give assurances or point to a statement. In practical terms this means that those who comply sooner rather than later are in a better place when winning contracts. It is likely that tender documentation will include more questions around this topic. Writing a slavery and human trafficking statement ('the statement') The government has not prescribed the length of or content to be included within the statement. What is required is to set out in the statement the steps that have been taken during the financial year to ensure slavery and human trafficking is not taking place in any part of its own business or in any of its supply chains capturing all the actions it has taken. However, an organisation can choose to make a statement to say that no such steps have been taken. The guidance includes top tips for writing a statement including keeping the statement succinct but cover all the relevant points, if an organisation can provide appropriate links to relevant publications, documents or policies, do so and specifying actions by specific country will help readers to understand the context of any actions or steps taken to minimise risk. If an organisation has policies that are publically available and published on their website, rather than starting from scratch, the organisation may link to those policies in the statement. It is important to remember that the requirement to make a statement remains irrespective of the existence of those policies. Information which an organisation could choose to include is set out in the guidance. When writing a statement, there is a balance to be struck between providing sufficient detail to enable an understanding of the efforts made by the organisation and the technical or legal detail which might make the statement inaccessible. The government expects the statement to evolve with the first statements providing details of what organisations are doing to act on the issue of modern slavery as well as their plans for the future (both in terms of due diligence and collaboration with others). Policies Although there is no prescriptive approach to drafting a policy, the guidance contains useful questions to consider when drawing up a policy supporting the statement. One of the areas in which the government is keen to see improvement is in the plight of temporary workers with whom the organisation will not have a direct contractual relationship. It is recommended in the guidance that organisations should have specific policies in place to ensure that the potential risk of modern slavery is mitigated. The guidance sets out good practice on what organisations should consider when putting policies together. Those who have attended our seminars and receive updates on modern slavery will have heard our experts advocating ideas identified in the guidance regarding best practice for risk assessment prior to policy drafting. Approving a statement The statement must be approved at the highest level of the organisation (i.e. by a director or a partner as appropriate). Senior level engagement is required. It is the responsibility of those in senior management to ensure there is a culture shift in the organisation to be aware of the risks of modern slavery. Policies must be implemented and procedures put in place to ensure those policies are followed. Organisations should ensure there is appropriate training in place for employees at all levels. It should be targeted to ensure the training has the most effect. Publishing a statement A link to the statement must be published in a prominent place on the home page of the organisation. The guidance recommends the link is clearly marked so it is apparent what it links to e.g. 'Modern Slavery Act Transparency Statement'. Where it forms part of a drop down menu, it should form an obvious part of that menu. Due Diligence The guidance recommends that due diligence procedures should be based on: proportionality of the risk itself the severity of the risk the influence the organisation has an informed risk assessment which has taken place Examples of information which could be considered as part of due diligence is contained in the guidance. In order to ensure the effectiveness of policies and action against perpetrators, due diligence should be conducted on an ongoing basis. Although the greatest level of engagement should be will 'first tier' suppliers, where possible, organisations should engage with 'second tier' suppliers. Integrity of investigations is key. Assessing and managing risk Organisations should consider the following areas when conducting risk assessments: business partnership risk country risk sector risk transaction risk The guidance emphasises that continuous assessment and risk review is essential. The government believes collaboration between those in particular sectors will help prevent modern slavery. By way of example, the guidance cites a Seafood Ethics Common Language Group to tackle problems identified in the Thai fishing industry. Human Rights The guidance refers to the UN Guiding Principles (UNGPs) which are based on three pillars of human rights. They are a useful reference point for organisations which choose to implement a human rights policy. Companies who are required to report under the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 who must also make a statement under the Modern Slavery Act should ensure requirements of both pieces of legislation are complied with. It is anticipated that organisations will make two separate statements rather than a single statement covering all requirements. What to do if you spot the signs of modern slavery If an instance of modern slavery is identified, organisations should always consider what approach will result in the safest outcome for the victim(s) whilst remembering the commercial clout the organisation holds over the perpetrator. The guidance suggests that termination of supplier relationships should be a last resort which should only be considered after all efforts to work collaboratively to remedy the situation have been exhausted. If you are in any doubt about how the provisions apply to your business or supply chain, please contact Ron Reid on 03700 86 8471 or Jos Kirkwood on 03700 86 8347. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Thu, 29 Oct 2015 00:00:00 Z<![CDATA[Hayley Saunders ]]><![CDATA[ The transparency in supply chains provisions came into force on 29 October 2015. The long awaited statutory guidance has been published. This briefing sets out the key points for business. Introduction The objective of the Modern Slavery Act 2015 is to prevent modern slavery entering the supply chain and organisations as well as preventing more people becoming victims. The stated aim of the government is to 'require businesses to be transparent about what they are doing and... increase competition to drive up standards'. The statutory guidance provides information and case studies about how organisations can comply with the transparency in supply chain provisions ('the provisions'). Supply chain has its 'every day' meaning but an annex to the guidance refers to all supply chains and contractual relationships. The provisions are designed to increase transparency by requiring organisations to set out the steps they are taking to tackle modern slavery. We have previously reported on the key legal obligations set out in the provisions. It is anticipated that the first statements could show what businesses are doing to begin to act on the issue of modern slavery in their supply chain as well as identifying what investigation or collaboration needs to happen with others to cause change. The Modern Slavery Act 2015 The provisions seek to create a 'level playing field' between those who are caught by the requirements who already act responsibly and those who need to change policies to ensure they do so. The hope is that businesses will go beyond their legal duty and do more to tackle modern slavery in their supply chains because it is 'the right thing to do'. The underlying message is that businesses who fail to comply with the provisions risk damage to their reputation and their brand and suggest that consumers, investors and NGOs apply pressure where they perceive that organisations haven't done enough to comply. Who is required to comply? A commercial organisation with a turnover of £36m or more which carries on business (or part of a business) in the UK and supplies goods or services is required to produce a slavery and human trafficking statement for each financial year of the organisation. A common sense approach is to be adopted. Even if the organisation carries out charitable, public functions or educational aims, the organisation will be required to comply with the provisions if it carries out commercial activities and meets the turnover threshold. This means that certain public sector organisations will be caught if they carry out commercial activities. Franchises Franchisers are required to make a statement if the turnover of the franchiser meets the £36m threshold. When making the statement, the franchiser may choose to include activities of franchisees in order to protect the franchiser's brand. Such an approach will show the franchiser takes the issue of modern slavery seriously. If the franchisee meets the turnover threshold in its own right, the franchisee is required to make its own statement. Parents and subsidiaries If a parent or a subsidiary (irrespective of location) meets the requirements of the provisions, they are required to make a statement in their own right even if another company in the group does so. The definition of a subsidiary has the meaning given by section 1162 of the Companies Act 2006 The guidance states that it is for individual parent organisations to determine whether or not a subsidiary forms part of its supply chain. The provisions are referred to in the guidance as 'tests in the Act'. When considering whether or not the provisions apply to parents or subsidiaries, organisations should use the provisions as tests. If all the stages of the test apply, the organisation (or part thereof) will be caught and required to comply. It is highly recommended for parent companies to consider including the activities of foreign subsidiaries in their statement especially where that foreign subsidiary is based in high risk location or sector. Penalties The civil penalties of an injunction or order for specific performance of a statutory duty remain but given the propensity for naming and shaming (most recently reported in the press regarding the non-payment of the national minimum wage) it is likely that organisations can expect the Anti-Slavery Commissioner to follow suit. The provisions are designed to create a 'race to the top' through competition to 'drive up standards'. Transitional provisions are in place giving time for organisations to formulate and implement strategies rather than adopting a hasty approach. We are already seeing large clients experiencing pressure from those they supply to give assurances or point to a statement. In practical terms this means that those who comply sooner rather than later are in a better place when winning contracts. It is likely that tender documentation will include more questions around this topic. Writing a slavery and human trafficking statement ('the statement') The government has not prescribed the length of or content to be included within the statement. What is required is to set out in the statement the steps that have been taken during the financial year to ensure slavery and human trafficking is not taking place in any part of its own business or in any of its supply chains capturing all the actions it has taken. However, an organisation can choose to make a statement to say that no such steps have been taken. The guidance includes top tips for writing a statement including keeping the statement succinct but cover all the relevant points, if an organisation can provide appropriate links to relevant publications, documents or policies, do so and specifying actions by specific country will help readers to understand the context of any actions or steps taken to minimise risk. If an organisation has policies that are publically available and published on their website, rather than starting from scratch, the organisation may link to those policies in the statement. It is important to remember that the requirement to make a statement remains irrespective of the existence of those policies. Information which an organisation could choose to include is set out in the guidance. When writing a statement, there is a balance to be struck between providing sufficient detail to enable an understanding of the efforts made by the organisation and the technical or legal detail which might make the statement inaccessible. The government expects the statement to evolve with the first statements providing details of what organisations are doing to act on the issue of modern slavery as well as their plans for the future (both in terms of due diligence and collaboration with others). Policies Although there is no prescriptive approach to drafting a policy, the guidance contains useful questions to consider when drawing up a policy supporting the statement. One of the areas in which the government is keen to see improvement is in the plight of temporary workers with whom the organisation will not have a direct contractual relationship. It is recommended in the guidance that organisations should have specific policies in place to ensure that the potential risk of modern slavery is mitigated. The guidance sets out good practice on what organisations should consider when putting policies together. Those who have attended our seminars and receive updates on modern slavery will have heard our experts advocating ideas identified in the guidance regarding best practice for risk assessment prior to policy drafting. Approving a statement The statement must be approved at the highest level of the organisation (i.e. by a director or a partner as appropriate). Senior level engagement is required. It is the responsibility of those in senior management to ensure there is a culture shift in the organisation to be aware of the risks of modern slavery. Policies must be implemented and procedures put in place to ensure those policies are followed. Organisations should ensure there is appropriate training in place for employees at all levels. It should be targeted to ensure the training has the most effect. Publishing a statement A link to the statement must be published in a prominent place on the home page of the organisation. The guidance recommends the link is clearly marked so it is apparent what it links to e.g. 'Modern Slavery Act Transparency Statement'. Where it forms part of a drop down menu, it should form an obvious part of that menu. Due Diligence The guidance recommends that due diligence procedures should be based on: proportionality of the risk itself the severity of the risk the influence the organisation has an informed risk assessment which has taken place Examples of information which could be considered as part of due diligence is contained in the guidance. In order to ensure the effectiveness of policies and action against perpetrators, due diligence should be conducted on an ongoing basis. Although the greatest level of engagement should be will 'first tier' suppliers, where possible, organisations should engage with 'second tier' suppliers. Integrity of investigations is key. Assessing and managing risk Organisations should consider the following areas when conducting risk assessments: business partnership risk country risk sector risk transaction risk The guidance emphasises that continuous assessment and risk review is essential. The government believes collaboration between those in particular sectors will help prevent modern slavery. By way of example, the guidance cites a Seafood Ethics Common Language Group to tackle problems identified in the Thai fishing industry. Human Rights The guidance refers to the UN Guiding Principles (UNGPs) which are based on three pillars of human rights. They are a useful reference point for organisations which choose to implement a human rights policy. Companies who are required to report under the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 who must also make a statement under the Modern Slavery Act should ensure requirements of both pieces of legislation are complied with. It is anticipated that organisations will make two separate statements rather than a single statement covering all requirements. What to do if you spot the signs of modern slavery If an instance of modern slavery is identified, organisations should always consider what approach will result in the safest outcome for the victim(s) whilst remembering the commercial clout the organisation holds over the perpetrator. The guidance suggests that termination of supplier relationships should be a last resort which should only be considered after all efforts to work collaboratively to remedy the situation have been exhausted. If you are in any doubt about how the provisions apply to your business or supply chain, please contact Ron Reid on 03700 86 8471 or Jos Kirkwood on 03700 86 8347. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{0C75FD7A-6B4D-4DD6-AC26-B4A62B5EA99F}https://www.shoosmiths.co.uk/client-resources/legal-updates/modern-slavery-transparency-supply-chain-provisions-10599.aspxModern Slavery Act 2015: Transparency in Supply Chain provisions in force this week The Modern Slavery Act 2015 (Commencement No. 3 and Transitional Provision) Regulations 2015 have been made. They confirm that Section 54 relating to transparency in the supply chain will be in force on 29 October 2015. The UK Modern Slavery Act 2015 introduces a new area of compliance for commercial organisations. Under the Act commercial organisations, supplying goods or services, with a turnover of £36 million or above will have to publish an annual statement setting out what they are doing to ensure that there is no modern slavery both in their own organization and in any of their supply chains. The turnover calculation includes those organisations that are only carrying out part of their business in the UK, as well as including the turnover of foreign subsidiaries, so supply chains can be complex particularly as services are caught as well as goods. Although the provisions come into force on Thursday, it is important for organisations not to panic. Transitional provisions provide that organisations with a financial year-end from 29 October up to and including 30 March 2016 will not be required to make a slavery and human trafficking statement for the financial year 2015/16. Organisations with a financial year-end of 31 March 2016 will be required to publish a slavery and human trafficking statement for the financial year 2015/16 within 6 months of their financial year-end. For general guidance on the steps to take now please refer to our previous update. Watch this space: statutory guidance accompanying the provisions is expected to issue shortly. If you are in any doubt about how the provisions apply to your business or supply chain, please contact Ron Reid on 03700 86 8471 or Jos Kirkwood on 03700 86 8347. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Wed, 28 Oct 2015 00:00:00 Z<![CDATA[Hayley Saunders ]]><![CDATA[ The Modern Slavery Act 2015 (Commencement No. 3 and Transitional Provision) Regulations 2015 have been made. They confirm that Section 54 relating to transparency in the supply chain will be in force on 29 October 2015. The UK Modern Slavery Act 2015 introduces a new area of compliance for commercial organisations. Under the Act commercial organisations, supplying goods or services, with a turnover of £36 million or above will have to publish an annual statement setting out what they are doing to ensure that there is no modern slavery both in their own organization and in any of their supply chains. The turnover calculation includes those organisations that are only carrying out part of their business in the UK, as well as including the turnover of foreign subsidiaries, so supply chains can be complex particularly as services are caught as well as goods. Although the provisions come into force on Thursday, it is important for organisations not to panic. Transitional provisions provide that organisations with a financial year-end from 29 October up to and including 30 March 2016 will not be required to make a slavery and human trafficking statement for the financial year 2015/16. Organisations with a financial year-end of 31 March 2016 will be required to publish a slavery and human trafficking statement for the financial year 2015/16 within 6 months of their financial year-end. For general guidance on the steps to take now please refer to our previous update. Watch this space: statutory guidance accompanying the provisions is expected to issue shortly. If you are in any doubt about how the provisions apply to your business or supply chain, please contact Ron Reid on 03700 86 8471 or Jos Kirkwood on 03700 86 8347. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>